EUR/USD Price Forecast: US Dollar pares slump, retains broad weakness

EUR/USD Current price: 1.1950

• Financial markets are more stable on Thursday, but the US Dollar remains weak.
• The United States will release trade and unemployment data in the American session.
• EUR/USD corrected overbought conditions and stabilized near multi-year highs.

The EUR/USD pair is under mild selling pressure on Thursday, extending its retracement after peaking at a fresh multi-year high of 1.2082 on Tuesday. The US Dollar (USD) collapsed after United States (US) President Donald Trump said that he was comfortable with a weaker Greenback. The American currency recovered some ground afterwards after US Treasury Secretary Scott Bessent said that Washington has a strong-dollar policy on Wednesday.

In the meantime, the Federal Reserve (Fed) announced its monetary policy decision, but in terms of price action, it was a non-event. The Fed kept the fed funds rate unchanged, floating in a 3.50–3.75% range. The accompanying statement showed policymakers believe uncertainty about the economic outlook remains elevated, as well as inflation.

Finally, Chairman Jerome Powell’s press conference was quite a disappointment, as journalists’ questions revolved around politics, Powell’s future, and the subpoena, all of which he refused to discuss.

Uncertainty surrounding US local and external policies keeps the USD on the losing side.

On the data front, the EU published January Consumer Confidence, which remained steady at -12.4. As for the US, the country will release the November Goods Trade Balance, weekly unemployment figures, and Q3 Unit Labor Cost and Nonfarm Productivity after Wall Street’s opening.

EUR/USD short-term technical outlook

The near-term picture shows the risk remains skewed to the upside. In the 4-hour chart, EUR/USD trades above all its moving averages, with the 20-period Simple Moving Average (SMA) rising above also bullish 100 and 200 SMAs. The Momentum indicator remains positive but has flattened, suggesting a slower upside drive. Meanwhile, the Relative Strength Index (RSI) indicator stabilized around 59, cooling from prior overbought readings.

Holding above the 20 SMA would keep the topside scenario in play, while a loss of traction would turn attention to deeper supports. Below, the 200 SMA at 1.1737 and the 100 SMA at 1.1729 align as subsequent cushions. A fresh expansion in momentum could pave the way for an extension higher. If RSI fails to reclaim 70, upside would stay capped and consolidation could emerge.

In the daily chart, EUR/USD is bullish. The pair develops far above all its moving averages, which keep heading firmly north. The 20-day SMA at 1.1734 offers relevant support while extending its advance above the 100- and 200-day SMAs. As per technical indicators, the RSI edges higher at around 67, while the Momentum indicator advances well into positive territory, hinting at a potential recovery through 1.2000 in the upcoming sessions.

(The technical analysis of this story was written with the help of an AI tool.)