THE ETERNAL SOVEREIGN

Tag: Eur/Usd

  • Major FX Pairs Face Critical Levels Amid Heightened Macro Volatility

    Macro uncertainty is intensifying just as EUR/USD and GBP/USD test pivotal technical zones. With interest-rate expectations shifting and tail risks mounting, the next directional move may depend more on macro catalysts than chart patterns.

    Both pairs are hovering near critical support and resistance levels, while a dense lineup of U.S. and European data raises the prospect of increased volatility. The dollar continues to trade in close correlation with Treasury yields and evolving Federal Reserve rate pricing, reinforcing the macro-driven backdrop.

    At the same time, tariff developments and geopolitical tensions are injecting additional tail risk ahead of the weekend, leaving markets vulnerable to sharp, sentiment-driven swings.

    Summary

    As the week moves into its final stretch, both Europe and the United States face a heavy slate of economic releases—and this is unlikely to be mere background noise for markets. Recent price action has already underscored how reactive EUR/USD and GBP/USD are to changes in relative rate expectations across the U.S., U.K., and euro area.

    With both currency pairs now positioned near critical technical thresholds, the incoming data flow carries the potential to do more than simply inject volatility. It may ultimately determine whether the latest directional moves gain traction—or begin to lose momentum and reverse.

    Heavy Data Calendar Lifts Volatility Threat

    Flash PMIs rarely fail to generate movement in EUR/USD and GBP/USD, largely because European participants tend to respond far more decisively to the releases than traders elsewhere. In the euro area, the focus is likely to center on price components and new orders, especially in light of the recent resilience in the single currency. In the UK, attention may gravitate toward price pressures, employment trends, and overall activity, reflecting the economy’s persistent softness.

    The more consequential headline risk, however, lies in the United States. The advance Q4 GDP print stands out. While backward-looking and heavily estimate-based, it still carries the potential to influence how the dollar closes the week. An upside surprise would reinforce the narrative of U.S. exceptionalism. A downside miss, on the other hand, could reignite expectations for Federal Reserve rate cuts—expectations that have recently been scaled back after generally firm data and relatively hawkish FOMC minutes.

    December’s core PCE deflator rarely delivers genuine surprises these days. Enhanced data mapping has largely diminished its shock factor, shifting attention toward the consumption and income components instead. Markets will scrutinize the consumption data for signs that recent weakness in goods demand has spilled into services, while income figures should provide a clearer indication of households’ capacity to sustain spending.

    US flash PMIs, meanwhile, have produced inconsistent market reactions and are often overshadowed when more significant releases land on the same day. Broadly speaking, they have tended to exaggerate the signal seen in ISM surveys. As a result, a stronger market response may emerge if there are clear signs of softening—particularly within the services sector.

    Weekend Risk Premium Builds

    Beyond the dense data schedule, traders also face mounting tail risks heading into the weekend. A ruling from the Supreme Court of the United States on the legality of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) could arrive around 10 a.m. U.S. time, although there is no certainty a decision will be issued today. Even the possibility is sufficient to keep markets cautious, given the potential implications for Treasury yields and overall risk sentiment.

    At the same time, Donald Trump has set a 10-day deadline for Iran to reach a deal or face potential military action. Considering the risks to global energy supply—and the United States’ position as a major energy producer—any pre-emptive strike would likely support the dollar against European currencies, particularly if it sparks a renewed wave of risk aversion.

    Regarding tariffs, the market reaction may remain relatively muted regardless of the court’s decision—unless investors begin to question whether any shortfall in government revenues can be covered through alternative channels. Should doubts arise on that front, both the dollar and longer-dated Treasuries could face meaningful downside pressure as fiscal concerns move to the forefront.

    Dollar Catalysts Return to Center Stage

    Underscoring the significance of the upcoming data and event risk, the US Dollar Index (DXY) has shown a notably tight correlation over the past week with Fed rate-cut expectations, front-end yield differentials, US two-year Treasury yields, and even Brent crude, as illustrated in the middle panel of the chart above. In practical terms, the dollar has reverted to trading primarily as a rates-and-yields narrative, with an added layer of sensitivity to energy prices.

    Yet the 20-day correlation metrics shown on the right paint a much less compelling picture. Over the past month, these relationships have been weak and statistically insignificant, serving as a reminder that the recent alignment may prove temporary rather than structural.

    GBP/USD Faces Growing Downside Pressure

    As discussed in earlier analysis this week, the release of key UK labour market and inflation figures acted as the catalyst that pushed GBP/USD out of its consolidation phase. Combined with firm U.S. data, the move triggered a decisive break below multiple technical markers, including the November uptrend and the 50-day moving average, before finding support at the 200-day moving average. Whether assessed through pure price action or momentum indicators, the bias now tilts toward increasing downside risk.

    The 14-period RSI continues to trend lower below the 50 mark, while MACD has crossed beneath its signal line and moved into negative territory—both reinforcing the build-up of bearish momentum. As a result, selling rallies appears more favorable than buying dips. That said, the pair’s proximity to the 200DMA provides a clearly defined reference point for structuring trades as incoming data and headlines shape sentiment.

    A sustained break below the 200DMA would strengthen the bearish case, opening the door for short positions with stops placed just above the average. Initial downside targets would sit at 1.3371, followed by 1.3300 and 1.3250. Conversely, if price manages to hold above the 200DMA, the setup could shift tactically. Long positions above the level, with stops placed beneath, would target 1.3535—a zone where several technical indicators, including the 50DMA, currently converge. A reclaim of that area would undermine the newly established bearish bias and shift directional risks back toward a sideways-to-higher outlook.

    Triangle Formation Brings Breakout Levels Into View

    With EUR/USD coiling within a descending triangle and momentum indicators drifting lower, downside risks appear to be gradually building. A decisive break beneath the confluence of the 50-day moving average and horizontal support at 1.1768 may prove pivotal in unlocking further weakness. Thursday’s doji candle aligns with that narrative, highlighting a degree of indecision among market participants at a technically sensitive juncture.

    While the bearish case in GBP/USD looks more straightforward—given recent UK data and the repricing of Bank of England rate expectations—the outlook for the euro is less clear-cut. That ambiguity reinforces the importance of upcoming data and headlines in shaping near-term direction. RSI (14) has slipped just below 50, offering a neutral-to-soft signal, while MACD has rolled over but remains marginally above zero, underscoring the lack of decisive momentum so far.

    The descending triangle structure keeps the downside break scenario firmly in focus, but confirmation is still required. A sustained break and close below the 50DMA/1.1768 area would strengthen the bearish case, with short positions targeting 1.1684 initially, followed by the 200-day moving average. Stops could be placed just above the broken support zone for protection.

    Conversely, if the pair manages to hold this confluence area, a tactical long setup may be considered with tight stops below, initially targeting the January downtrend line. Should price test but fail to clear that trendline convincingly, it may favor squaring positions or re-establishing shorts with stops above, aiming for a retest of the 50DMA/1.1768 region. A clean upside breakout, however, would alter the landscape, opening scope toward 1.1837 and potentially 1.1918, shifting directional risks back toward a sideways-to-higher bias.

    Sources: David Scutt

  • EUR/USD remains under selling pressure around the 1.1850 level.

    EUR/USD is slipping for a fifth consecutive session, though it continues to trade above the crucial 20-day SMA. Momentum indicators remain in positive-to-neutral territory, with the RSI hovering slightly above its midpoint and flattening, while the MACD stays above zero but just below its signal line — a sign that upside momentum has eased without fully turning bearish.

    The pair is stabilizing around 1.1865, extending its retreat from the 1.1900 area even as the US dollar softened on Friday following weaker inflation data that strengthened expectations of Fed rate cuts. Trading conditions are relatively quiet on Monday due to the US President’s Day holiday.

    If price rebounds from the short-term ascending trendline and breaks above the 38.2% Fibonacci retracement of the January 27–February 6 decline at 1.1885, the next resistance could appear near 1.1923, which aligns with the 50% Fibonacci level and recent monthly highs. A stronger push higher may target the 1.1960–1.1974 zone, just beneath the key 1.2000 mark — the highest level since mid-2021.

    On the downside, further weakness could bring the pair back toward the 20-day SMA near the 23.6% Fibonacci level at 1.1839. Below that, attention would shift to the 1.1800–1.1820 area, followed by the February 6 low of 1.1765, which sits just above the 50-day SMA.

    Overall, despite the recent pullback, the near-term outlook remains constructive as long as EUR/USD holds above the 20-day SMA, with the 50-day SMA acting as stronger support in case of a deeper correction.

    Sources: Nicola joined

  • EUR/USD holds key support as traders assess the next leg higher

    Key highlights

    • EUR/USD slipped below 1.1900 and tested support near 1.1780.
    • The pair broke above a key bearish trend line, previously acting as resistance around 1.1810 on the 4-hour chart.

    EUR/USD technical analysis

    On the 4-hour chart, EUR/USD tested the 61.8% Fibonacci retracement of the advance from the 1.1577 swing low to the 1.2082 peak. The pair has held above both the 100-period (red) and 200-period (green) simple moving averages, signaling underlying support.

    The pair is stabilizing above 1.1780 and has recently cleared the bearish trend line near 1.1810. On the upside, initial resistance is seen around 1.1850, followed by 1.1890. A sustained close above 1.1890 could pave the way for further gains toward 1.1920, with a potential extension toward the 1.2000 handle.

    On the downside, immediate support remains at 1.1780. A deeper pullback could test the 1.1720 area, while the key support level lies at 1.1700. A break below this zone would likely shift momentum in favor of the bears and could expose the 1.1650 region.

    Sources: Aayush Jindal

  • BoE and ECB Decisions Drive GBP/USD and EUR/USD Outlooks

    BoE’s Dovish Stance Pressures the Pound

    The Bank of England held its policy rate at 3.75%, but the decision revealed a notably divided committee, with four of the nine members voting in favor of another cut. This close split has reinforced expectations for a rate reduction as soon as March, particularly as inflation continues to ease and wage growth shows signs of cooling.

    The BoE now estimates that wage growth consistent with its 2% inflation target is roughly 3.25%, only slightly below current private-sector pay growth of about 3.6%. With inflation projected to fall toward 1.8% by April, the central bank appears increasingly comfortable with the prospect of further policy easing.

    Governor Andrew Bailey remains a pivotal swing vote, and if upcoming data confirms a softer labor market and moderating pay growth, he is widely expected to back a rate cut at the next meeting. Markets are already pricing in additional easing through the summer months.

    GBP/USD Technical Perspective

    GBP/USD has been trending lower, reflecting expectations of Bank of England rate cuts and a broadly dovish policy outlook.

    On the four-hour chart, the pair continues to trade within a well-defined descending channel, currently hovering around 1.3536. This structure indicates that sellers remain in control for the time being.

    That said, a notable support zone sits near 1.34, aligning with a previous accumulation area. A break lower within the channel could see price gravitate toward that level.

    Conversely, a move above the upper boundary of the channel would signal a shift in momentum and could open the door to a rebound toward the 1.37–1.38 area in the near term.

    Summary:

    • Trend: Bearish, within a descending channel
    • Support: 1.34
    • Resistance: 1.37–1.38
    • Key Catalyst: March Bank of England policy meeting

    ECB Remains Comfortably on Hold

    The European Central Bank left interest rates unchanged, signaling confidence that the eurozone economy remains in a solid position. Inflation is tracking close to the 2% target, growth is stable, and there is little immediate need to either tighten or ease policy.

    That said, past experience suggests the ECB is willing to resume rate cuts after extended pauses if conditions evolve. A meaningful appreciation in the euro or a dip in inflation below target could prompt policymakers to consider a modest “insurance cut” later in the year to guard against undershooting inflation.

    For now, however, the ECB appears comfortable remaining on hold, a stance that has translated into relatively calm market conditions.

    EUR/USD Technical Perspective

    EUR/USD continues to consolidate in a narrow range between 1.1780 and 1.1840, reflecting the ECB’s steady policy stance and a broader lack of directional conviction. Volatility remains subdued, underscoring ongoing market indecision.

    A renewed move lower could develop if expectations build around further ECB easing, or if euro strength becomes a concern for policymakers. Until a clear catalyst emerges, price action is likely to remain range-bound, with consolidation dominating near-term trading.

    Summary:

    • Trend: Sideways / range-bound
    • Range: 1.1780–1.1840
    • Downside risk: A decisive break below 1.1780 would expose a move toward 1.1700
    • Catalyst: Shift in ECB tone or renewed concerns over excessive euro strength

    In short:

    • The BoE’s dovish stance is pressuring the pound, leaving GBP/USD biased lower.
    • The ECB’s steady, wait-and-see approach is keeping the euro supported, though excessive euro strength could revive rate-cut speculation.
    • With both central banks leaning dovish, the next meaningful FX moves are likely to be driven by shifts in rate expectations, not policy surprises.

    Sources: Zorrays Junaid

  • EUR/USD Maintains Uptrend While Consolidating Recent Gains

    EUR/USD remains technically constructive, consolidating after a strong push toward recent highs. While short-term momentum has eased, the price action continues to reflect a pause within a broader uptrend rather than a trend reversal.

    Attention now turns to whether the pair can hold key support levels and reassert upside momentum in the sessions ahead.

    Trend Overview: Higher-High Pattern Remains Intact

    From a medium-term standpoint, EUR/USD continues to exhibit a well-defined bullish structure, marked by a sequence of higher highs and higher lows. The recent pullback comes after a sharp rally and appears corrective, suggesting profit-taking rather than a meaningful change in the underlying trend.

    Notably, downside momentum has been contained, supporting the view that buyers are still stepping in on dips.

    Moving Averages Continue to Act as Dynamic Support

    Price is currently holding near and above the 15-day and 20-day moving averages, both of which continue to slope higher.

    Key technical takeaways:

    • Moving averages are still functioning as dynamic support
    • Pullbacks have been modest relative to the preceding advance
    • No decisive break has occurred to signal deterioration in the trend

    As long as EUR/USD remains above these moving averages, the broader technical outlook stays constructive.

    Momentum: RSI Cools Without Undermining the Trend

    The 14-day RSI has pulled back toward the low-50s after previously reaching elevated readings.

    This momentum behavior suggests:

    • A healthy reset following strong upside momentum
    • Reduced risk of near-term overextension
    • Conditions more consistent with consolidation than exhaustion

    Importantly, there is no clear bearish divergence, reinforcing the view that the broader trend remains intact.

    Key Technical Zone: 1.1780–1.1820 in Focus

    The 1.1780–1.1820 area has become a key technical reference zone:

    • It previously served as resistance prior to the recent breakout
    • It is now acting as near-term support
    • A sustained hold above this range would strengthen the case for bullish continuation

    A failure to hold this zone could allow for a deeper pullback toward the moving averages, though such a move would still be considered corrective unless support is decisively broken.

    Broader Market Backdrop

    EUR/USD continues to be closely influenced by:

    • Broader trends in the U.S. dollar
    • Changes in global risk sentiment
    • Evolving expectations around relative monetary policy trajectories

    For now, the technical backdrop suggests that euro resilience remains intact, as long as external conditions stay broadly supportive.

    Outlook

    EUR/USD appears to be shifting from trend extension into a consolidation phase:

    • Holding above key support: The upside bias remains intact
    • Sideways consolidation: Would help reinforce the durability of the trend
    • Break below moving averages: Needed to meaningfully weaken the outlook

    Until such confirmation occurs, the balance of technical evidence continues to favor the bullish scenario.

    Overall, EUR/USD is consolidating following a strong advance, but the broader technical structure remains supportive. Momentum has eased in a constructive manner, key support levels are holding, and price action continues to point toward stabilization rather than reversal.

    As long as EUR/USD remains above established support zones, the uptrend stays intact, with scope for renewed upside once the consolidation phase resolves.

    Sources: Tafara Tsoka

  • EUR/USD edges higher toward 1.1770 as dovish Fed outlook boosts euro

    EUR/USD inched higher toward the 1.1770 area, finding modest support as the U.S. dollar struggled to extend its recent rally. Rising expectations of a more dovish Federal Reserve stance have capped further gains in the greenback. Meanwhile, the European Central Bank left interest rates unchanged at its policy meeting on Thursday, as widely expected.

    The EUR/USD pair edged higher toward the 1.1770 area during Asian trading on Friday, as the U.S. dollar eased amid growing speculation that the Federal Reserve could cut interest rates at its March policy meeting. The pair attracted modest buying interest as expectations for Fed easing gained traction.

    At the time of writing, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, was down 0.1% at around 97.85, although it remained close to Thursday’s weekly high of 97.98.

    According to the CME FedWatch tool, the probability of a 25-basis-point rate cut—taking the fed funds rate to a 3.25%–3.50% range—at the March meeting has risen to 22.7%, from just 9.4% on Wednesday. Dovish Fed expectations have strengthened following a string of labor market indicators pointing to softer demand. December JOLTS data showed job openings fell to 6.542 million, well below estimates of 7.2 million and the prior 6.928 million. Meanwhile, ADP data released on Wednesday showed private sector payrolls rose by only 22,000 in January, down from 37,000 in December.

    On the other hand, the euro remained broadly pressured despite the European Central Bank’s policy decision on Thursday. The ECB left interest rates unchanged, as expected, and played down the recent dip in eurozone inflation, reaffirming that inflation is likely to stabilize around its 2% target over the medium term. The central bank also cautioned about an uncertain geopolitical backdrop.

    Sources: Sagar Dua

  • EUR/USD Signals a Breakdown — Could the Pair Fall Further?

    Key Highlights

    • EUR/USD began a renewed downturn after failing to hold above 1.2080.
    • The pair slipped below a crucial bullish trend line, with prior support located around 1.1880 on the 4-hour chart.

    EUR/USD Technical Outlook

    On the 4-hour timeframe, EUR/USD broke beneath an important ascending trend line at 1.1880, triggering the latest leg lower. Price action also moved below the 38.2% Fibonacci retracement of the rally from the 1.1577 swing low to the 1.2083 peak.

    Near-term support is seen around 1.1820, aligning with the 50% Fibonacci retracement of the same upward move. A stronger support zone for buyers could emerge near the 1.1800 level.

    The key support level is positioned at 1.1770. A break below this zone could expose EUR/USD to a test of the 200-period simple moving average (green, 4-hour), followed by the 100-period simple moving average (red, 4-hour).

    On the upside, any renewed advance is likely to encounter resistance near 1.1910. The first major obstacle for buyers stands around 1.1940, with an additional barrier near 1.1960. A decisive close above 1.1960 would strengthen the bullish case and potentially pave the way for a move back toward the 1.2080 area.

    Sources: Aayush Jindal

  • EUR/USD falls as Warsh Fed nomination and strong US PPI fuel Dollar rally

    • EUR/USD drops 0.75% as Kevin Warsh’s Fed nomination lifts US yields and fuels Dollar demand.
    • Hot US producer inflation reinforces expectations for a steady Fed, pushing Treasury yields above 4.25%.
    • Solid German and Eurozone GDP figures fail to counter Dollar strength driven by policy repricing.

    EUR/USD slid 0.75% in the North American session as broad US Dollar strength followed Trump’s mildly hawkish Fed nominee and an inflation report supporting a steady-rate stance. The pair was trading at 1.1882 at the time of writing, down from a session high of 1.1974.

    Euro sinks below 1.19 as hawkish Fed leadership signals and sticky inflation crush rate-cut hopes

    Kevin Warsh has been named by President Trump as the next Chair of the Federal Reserve, confirming rumors that surfaced late Thursday. Financial markets reacted swiftly, sending precious metals sharply lower while the US Dollar climbed nearly 1%, as measured by the US Dollar Index (DXY), which tracks the greenback against six major peers. The DXY is on course to close above the 97.00 mark.

    US Treasury yields also advanced, with the 10-year yield rising toward 4.25%. Meanwhile, US producer-side inflation edged higher, moving further away from the Federal Reserve’s 2% target and reinforcing the case for keeping interest rates unchanged. In addition to the December Producer Price Index (PPI) release, comments from Federal Reserve officials remained in focus.

    Separately, breaking news reported that the US Senate reached an agreement to pass a government funding package later tonight, averting a potential shutdown, according to Politico.

    Rising Treasury yields suggest investors see reduced odds that Warsh would pursue aggressive rate cuts to appease the White House. At the time of writing, the US 10-year Treasury yield was up around 1.5 basis points at 4.247%.

    In Europe, Germany’s economy expanded by 0.4% year-on-year, beating expectations. However, stronger-than-forecast GDP readings for Germany and the Eurozone, along with an uptick in German inflation, failed to offer meaningful support to EUR/USD.

    Looking ahead, the US economic calendar will feature a batch of labor market data, speeches from Fed officials, and January ISM Manufacturing and Services PMIs. In Europe, HCOB flash PMIs for the Eurozone, Germany, and France, alongside the European Central Bank’s monetary policy meeting, could inject volatility into EUR/USD.

    Daily market movers: Dollar comeback sends Euro tumbling

    St. Louis Fed President Alberto Musalem said there is no need for further rate cuts at present, noting that the current 3.50%–3.75% policy range is broadly neutral. He added that easing would only be warranted if the labor market weakens significantly or inflation falls materially.

    Fed Governor Stephen Miran backed Kevin Warsh as a strong candidate for Fed Chair, attributing the recent rise in producer prices largely to housing costs and portfolio management fees. Meanwhile, Fed Governor Christopher Waller said the labor market remains soft despite steady growth, arguing inflation would be closer to 2% without tariffs, which he said are keeping price growth near 3%. Waller added that policy should be closer to neutral, around 3%.

    Atlanta Fed President Raphael Bostic called for patience, stressing that interest rates should remain somewhat restrictive. He warned that the full inflationary impact of tariffs has yet to be felt and expects price pressures to persist.

    US producer inflation data reinforced the cautious tone. The Producer Price Index (PPI) held steady at 3.0% YoY in December, missing expectations for a slowdown to 2.7%. Core PPI accelerated to 3.3% YoY from 3.0%, defying forecasts for a decline and highlighting ongoing upstream price pressures.

    In Europe, EU GDP grew 1.4% YoY in Q4, unchanged from Q3 but above expectations. Germany’s economy expanded 0.4% YoY, beating forecasts and improving from the prior quarter. German inflation, measured by the HICP, edged up to 2.1% in January from 2.0%, remaining within the ECB’s target range.

    Technical outlook: EUR/USD uptrend under threat after break below 1.1850

    The EUR/USD technical outlook suggests the uptrend is under threat after the pair failed to sustain gains above the 2025 high at 1.1918, accelerating the decline below 1.1850. The Relative Strength Index (RSI) has turned mildly bearish, indicating a shift in momentum that could open the door to further downside.

    On the downside, initial support is seen at 1.1800. A decisive break below this level could expose the 20-day simple moving average (SMA) at 1.1743.

    On the upside, immediate resistance stands at 1.1900. A move back above this level would bring 1.1950 into focus, followed by the yearly high at 1.2082.

    EUR/USD Daily Chart

    Sources: Fxstreet

  • When will the German and Eurozone Q4 GDP figures be released, and what impact could they have on EUR/USD?

    Overview of German and Eurozone Q4 GDP

    Germany’s Federal Statistics Office will publish preliminary fourth-quarter GDP figures at 09:00 GMT on Friday, followed by Eurostat’s release of flash Eurozone GDP data at 10:00 GMT for the same period.

    Germany’s economy is expected to expand by 0.2% quarter-over-quarter in Q4, rebounding from stagnation in the previous quarter, while annual growth is forecast to remain unchanged at 0.3%. At the Eurozone level, seasonally adjusted GDP is projected to grow by 0.2% QoQ in the fourth quarter, down from 0.3% previously, with year-over-year growth seen moderating to 1.2% from 1.4%.

    How might Germany and the Eurozone’s Q4 GDP data influence the EUR/USD exchange rate?

    The EUR/USD pair may face downside pressure if Germany and Eurozone GDP figures come in line with forecasts. Investors will also closely monitor December unemployment data from both regions, as well as Germany’s Consumer Price Index (CPI for January).

    ECB policymaker Martin Kocher cautioned that additional strength in the Euro could lead the central bank to restart interest-rate cuts. After his remarks, market expectations for a summer rate reduction edged higher, with the implied probability of a July cut increasing to roughly 25% from around 15%. The ECB is set to meet next week and is broadly expected to leave interest rates unchanged.

    Meanwhile, EUR/USD is under strain as the US Dollar gains traction amid speculation that US President Donald Trump may nominate former Federal Reserve Governor Kevin Warsh as the next Fed Chair. Trump indicated late Thursday that he would reveal his decision on Friday morning, with markets leaning toward Warsh, who is perceived as relatively hawkish.

    From a technical perspective, EUR/USD is hovering near 1.1920 at the time of writing. Daily chart analysis continues to point to a bullish bias, with the pair holding within an ascending channel. A move toward the upper channel boundary near 1.2050 is possible, followed by 1.2082, the highest level since June 2021. On the downside, initial support is seen at the nine-day Exponential Moving Average (EMA) around 1.1870, with further support near the lower boundary of the channel at approximately 1.1840.

    Sources: Fxstreet

  • EUR/USD remains on course toward 1.2000

    EUR/USD extended Monday’s positive momentum, pushing closer to the key 1.2000 level and reaching highs not seen since June 2021. The latest advance reflects continued selling pressure on the U.S. dollar, supported by a constructive risk backdrop and renewed investor focus on potential tariff-related risks stemming from the White House.

    Macro & Fundamental Overview

    EUR/USD’s bullish momentum remains firmly intact, closely mirroring persistent selling pressure on the U.S. dollar, which continues to be weighed down by concerns over trade policy, questions surrounding the Federal Reserve’s independence, and renewed shutdown risks.

    The pair extended its advance for a fourth straight session on Tuesday, edging closer to the pivotal 1.2000 level for the first time since June 2021.

    The latest leg higher reflects a further deterioration in the dollar’s outlook amid revived trade tensions and geopolitical uncertainty, all ahead of the Federal Reserve’s interest rate decision due on Wednesday.

    Meanwhile, sentiment surrounding U.S.–European Union trade relations has improved after President Donald Trump softened his rhetoric last week regarding potential tariffs tied to the Greenland dispute. Markets have interpreted this shift positively, boosting risk appetite and lending support to the euro alongside other risk-sensitive currencies.

    By contrast, the U.S. dollar continues to underperform. The Dollar Index (DXY) remains under heavy pressure, extending its decline toward the 96.00 area — levels last seen in late February 2022.

    The FED: Rates on hold, politics in focus

    The Federal Reserve delivered its widely anticipated December rate cut, but the key signal came from its messaging rather than the policy action itself. A divided vote and Chair Jerome Powell’s measured language suggested that additional easing is far from assured.

    The Fed begins its two-day policy meeting today, with markets largely expecting rates to remain unchanged when the decision is released on Wednesday.

    However, monetary policy may not be the primary focus this time. Market attention has increasingly turned to questions surrounding the Fed’s independence after reports earlier this month of a Justice Department investigation involving Chair Powell.

    Compounding the uncertainty, President Trump has indicated that an announcement on his nominee for the next Fed Chair could be imminent, keeping scrutiny on the central bank well beyond the outcome of this week’s meeting.

    ECB urges patience, not complacency

    The European Central Bank left interest rates unchanged at its December 18 meeting, adopting a more measured and patient tone that has pushed expectations for near-term rate cuts further into the future. Modest upward revisions to growth and inflation projections helped underpin this approach.

    Minutes from the meeting, released last week, showed policymakers saw little immediate need to adjust policy. With inflation hovering near target, the ECB has room to remain patient, while still retaining flexibility should risks materialize.

    Governing Council members emphasized that patience does not equate to complacency. Monetary policy is viewed as appropriately calibrated for now, but not on autopilot. Markets appear to have absorbed this message, currently pricing in just over 4 basis points of easing over the coming year.

    Positioning remains constructive, but confidence has softened

    Speculative positioning remains tilted toward the euro, although bullish conviction appears to be easing.

    CFTC data for the week ended January 20 show non-commercial net long positions declining to a seven-week low of around 111.7K contracts. At the same time, institutional participants also reduced short positions, which now stand near 155.6K contracts.

    Meanwhile, open interest slipped to approximately 881K contracts, breaking a three-week streak of increases and suggesting that market participation may be thinning alongside fading confidence.

    Key Events Ahead

    Near term: The FOMC meeting is set to keep attention firmly on the U.S. dollar, while flash inflation data from Germany and preliminary GDP readings for the euro area will dominate the regional data calendar later in the week.

    Risk: A more hawkish-than-expected outcome from the Fed could quickly tilt momentum back in favor of the dollar. In addition, a clear break below the 200-day simple moving average would increase the risk of a deeper medium-term correction.

    EUR/USD Technical Outlook

    EUR/USD continues to exhibit a firm bullish bias, trading at levels last seen in mid-2021 while gradually shifting focus toward the key 1.2000 psychological handle.

    On the downside, initial support is located at the 2026 low of 1.1576 (January 19), reinforced by the closely watched 200-day simple moving average. A more pronounced correction could open the door to the November 2025 trough at 1.1468, followed by the August base at 1.1391.

    Momentum indicators remain broadly supportive of further gains, although elevated conditions may challenge the immediate upside. The Relative Strength Index is hovering near 75, pointing to overbought territory, while an Average Directional Index reading above 26 confirms the presence of a well-established trend.

    Bottom Line

    For the time being, EUR/USD continues to be influenced primarily by U.S.-centric developments rather than euro area dynamics.

    Absent clearer signals from the Federal Reserve on the extent of potential policy easing, or a more compelling cyclical recovery in the eurozone, any additional upside is likely to unfold in a steady, incremental manner rather than marking the beginning of a decisive breakout.

    Sources: Fxstreet

  • When will the German IFO Survey be released, and what impact could it have on the EUR/USD exchange rate?

    Overview of the German IFO Survey

    Germany’s IFO Institute is set to release its January Business Survey on Monday at 09:00 GMT.

    The headline IFO Business Climate Index is forecast to edge up to 88.1 in January, from 87.6 in December. In the previous release, the Current Assessment Index stood at 85.6, while the Expectations Index came in at 89.7.

    How might the German IFO Survey influence the EUR/USD exchange rate?

    EUR/USD could trade sideways if the German IFO Business Survey meets expectations, as heightened safe-haven demand continues to cap upside momentum despite the pair opening with a gap higher. Meanwhile, the Euro may hold relatively steady after Eurozone PMI figures signaled weakness in the services sector in January, reinforcing expectations that the European Central Bank (ECB) will keep interest rates unchanged. Earlier data from Germany was more constructive, with the Services PMI exceeding forecasts and remaining in expansionary territory, while the Manufacturing PMI showed improvement but stayed below the 50 threshold.

    The pair comes under pressure as the US Dollar regains intraday strength, supported by rising risk aversion linked to trade and geopolitical concerns. US President Donald Trump warned of potential 100% tariffs on Canadian imports should Ottawa pursue a trade agreement with China. Canadian Prime Minister Mark Carney clarified that Canada has no intention of negotiating a free trade deal with Beijing. Trump also noted that a US aircraft carrier strike group is en route to the Middle East amid escalating tensions with Iran.

    From a technical perspective, EUR/USD pulls back after opening at four-month highs and is trading near 1.1860 at the time of writing. Despite the dip, the broader bullish structure remains intact, with the 14-day Relative Strength Index (RSI) hovering around 69.00, indicating strong—though stretched—momentum. The pair could attempt a retest of the four-month peak at 1.1897, close to the key psychological resistance at 1.1900. On the downside, immediate support is seen at the nine-day Exponential Moving Average (EMA) near 1.1739.

    Sources: Fxstreet

  • EUR/USD climbs above 1.1600 as Europe responds to Trump’s tariff threats

    • EUR/USD edges higher toward the 1.1625 area in early European trading on Monday, as the euro finds support from signs that Europe is prepared to respond to U.S. tariff measures.
    • The move follows President Donald Trump’s announcement of a 10% tariff on goods from several European countries, prompting pushback from European leaders.
    • Meanwhile, expectations that the Federal Reserve will keep interest rates unchanged at its January meeting—amid a resilient labor market and still-elevated inflation—have weighed on the U.S. dollar, providing additional support for the pair.

    The EUR/USD pair advances to around 1.1625 in early European trading on Monday, snapping a four-day losing streak. The U.S. dollar comes under modest pressure against the euro after President Donald Trump threatened to escalate tariffs on eight European nations opposing his proposal for the United States to acquire Greenland.

    U.S. markets are closed on Monday in observance of Martin Luther King Jr. Day.

    Over the weekend, Trump announced a 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the United Kingdom, set to take effect on February 1. He added that the levy would rise to 25% in June unless an agreement is reached allowing the U.S. to purchase Greenland.

    Europe is set to respond after President Donald Trump imposed additional tariffs on key allies, with European leaders expected to convene an emergency meeting in the coming days to consider potential retaliation. Renewed concerns over a trade war and the longer-term implications of Trump’s latest move have weighed on the U.S. dollar, providing support for the EUR/USD pair.

    “While one could argue the tariffs are a threat to Europe, it is actually the dollar that is absorbing most of the impact, as markets appear to be pricing in a higher political risk premium for the U.S. currency,” said Khoon Goh, head of Asia research at ANZ.

    That said, stronger-than-expected U.S. labor market data released last week have delayed expectations for further Federal Reserve rate cuts until June, which could help cap downside pressure on the dollar. According to the CME FedWatch tool, markets are pricing in nearly a 95% probability that the Federal Open Market Committee will leave rates unchanged at its January 27–28, 2026 meeting.

    Sources: Investing

  • The US Dollar Could Gain Strength Following the Fed’s Turmoil

    Yesterday, the US CPI came in weaker than anticipated, supporting our prediction of a Fed rate cut in March. However, we expect the market to take a few more weeks before fully embracing this outlook. The US dollar could recover more than its recent losses, possibly driven by a hawkish stance following the Powell criminal investigation. In the meantime, we’ll continue to watch the Japanese yen closely today, along with developments in the Greenland discussions.

    USD: We Maintain a Short-Term Optimistic Outlook

    US inflation came in softer than consensus and well below our expected 0.4% month-on-month core reading. Yet, yesterday’s market reaction actually reinforced our short-term positive outlook on the dollar: despite the weak CPI data, Fed rate expectations barely shifted, and the dollar quickly regained strength.

    This may partly be due to market caution in over-interpreting the CPI figures amid ongoing shutdown-related distortions. It also indicates that concerns about the Fed’s independence are diminishing, helped by expectations that the criminal probe into Chair Powell may not advance much further and opposition from some GOP lawmakers. We believe there’s a fair chance the dollar will ultimately come out stronger from this situation, as Powell might adopt a more firmly hawkish stance to assert Fed independence.

    Additionally, the key message from yesterday’s CPI report is the continued softness in goods prices, highlighting how limited the tariff effects on inflation have been. Several tariff-sensitive categories remained weak, including appliances (-4.3% MoM), furniture (-0.4%), new vehicles (0.0%), and video and audio equipment (-0.4%). This clear trend suggests US retailers are still squeezing their margins. Overall, this strengthens our confidence in a Fed rate cut in March, although it may take time for markets to fully accept this outlook.

    Today, focus shifts to November’s PPI, with core PPI expected to rise by 0.2% month-on-month, and retail sales, which are anticipated to remain fairly strong. A busy lineup of Fed speakers—including Paulson, Miran, Kashkari, Bostic, and Williams—will be closely watched for any subtle hawkish signals in support of Powell and the Fed’s independence.

    Additionally, the Supreme Court is expected to issue a ruling on tariffs today, likely unfavorable. If that happens, significant noise from the Trump administration is expected, though markets are unlikely to be caught off guard. Our baseline expectation is for a mildly positive reaction in the dollar.

    EUR: Greenland Discussions Likely to Have Limited Market Impact

    A US delegation, including JD Vance and Marco Rubio, is scheduled to meet today with officials from Denmark and Greenland. So far, US threats related to Greenland have had minimal impact on markets—limited mostly to some movements in EUR/DKK forwards—meaning there’s little risk premium to be unwound even if the talks lead to a cooperative outcome. Nevertheless, any progress could help eliminate a lingering geopolitical “black swan” risk for European currencies.

    There seems to be potential for an agreement, likely based on the US abandoning any claims of “ownership” over Greenland—a stance firmly rejected by both Denmark and Greenland—in exchange for enhanced economic partnerships and a greater US military presence.

    Positive headlines from the talks might ease the EUR/USD’s recent decline slightly, but we still expect the pair to approach 1.1600 in the near term.

    JPY: Approaching the 160 Level for a Key Test

    The USD/JPY rally shows no signs of slowing. Rising speculation about snap elections is bringing back a political risk premium, giving another push to test Japan’s currency tolerance band. Meanwhile, ongoing diplomatic tensions between Japan and China are adding more momentum to the move.

    On Monday, we viewed 160 as a key upside target. While intervention concerns may slow the rally near that level, it increasingly looks like 160 will eventually be tested. Recall that in July 2024, Japan allowed the pair to surpass 160 and only intervened when it neared 162. Pinpointing the exact intervention level is tricky, but since the BoJ hasn’t acted sooner, it’s reasonable to expect they’ll wait until the pair exceeds 160.

    For context, the first intervention on July 11, 2024, led to a 1.8% drop in USD/JPY. Interestingly, back then, CFTC net non-commercial positions on the yen were at -52% of open interest, whereas now they are 3% net-long, despite spot price action suggesting otherwise.

    The crucial question is whether FX interventions alone can sustain a USD/JPY recovery. Historically, they haven’t. In 2024, interventions curtailed short-term gains but the subsequent USD/JPY decline was driven mainly by a sharp 50bp drop in US 2-year swap rates over the next month. That scenario seems unlikely now, and with snap election risks ongoing, markets remain hesitant to price in a BoJ rate hike before summer.

    Sources: ING

  • EUR/USD Weekly Forecast: U.S. Dominates Global Market Direction at the Start of 2026

    U.S. employment figures reinforce the Federal Reserve’s cautious stance on monetary policy. Meanwhile, Europe’s economic growth remains sluggish, but policymakers appear comfortable with the current pace. As demand for the U.S. Dollar stays strong, the EUR/USD pair has potential to continue its downward move toward the 1.1470 level.

    The EUR/USD pair opened the year on a weak note, declining for the second week in a row to hover near 1.1640, marking its lowest level in a month. The US Dollar gained strength across the foreign exchange market, supported by geopolitical tensions and robust US employment figures.

    Geopolitical Unrest Drives Financial Markets Early in 2026

    On Saturday morning, the world learned that U.S. President Donald Trump had executed a precise military operation in Venezuela, capturing then-President Nicolás Maduro and his wife, Cilia Flores, and transporting them to the United States to face charges related to narco-terrorism. Delcy Rodriguez, Maduro’s Vice-President, has now taken control of Venezuela. Although there was initial criticism of Trump’s actions, Rodriguez quickly shifted her stance and expressed willingness to cooperate with the U.S.

    President Donald Trump did not hide his motives for the U.S. military action in Venezuela. At a press conference following the operation that removed Nicolás Maduro from power, Trump said the United States would exercise control over Venezuela and its oil resources and warned of further measures if the Venezuelan government resisted. He described a future “transition” for the country’s governance, but did not outline specific plans for democracy or civilian rule.

    In the days after the raid, international tensions gradually eased, but the situation remained unresolved. One clear strategic factor behind the U.S. intervention was limiting Venezuela’s oil ties with major global powers, including Russia and China — a goal linked to broader geopolitical rivalry.

    Meanwhile, Russia carried out a significant missile strike on Ukraine early on Friday, shortly after Ukraine and its European partners agreed on elements of postwar security guarantees. The attack was widely interpreted as Russian President Vladimir Putin challenging Western support for Kyiv and signaling that sanctions, including restrictions on Russian oil, would not deter Moscow’s military actions.

    In addition, Trump reignited controversy with comments about Greenland, an autonomous territory of Denmark. He argued that the U.S. needs Greenland for national security reasons and suggested Washington might pursue control of the island — a stance that drew criticism from European leaders and sparked fears of future U.S. territorial ambitions.

    Europe Maintains Ongoing Stability

    News from Europe has had little impact on the Euro (EUR), which is understandable given the Eurozone’s fragile yet steady stability, with ongoing growth, manageable inflation, and no significant employment concerns.

    Eurostat reported that the seasonally adjusted unemployment rate in the Euro area stood at 6.3% in November, slightly down from 6.4% in October 2025 but up from 6.2% in November 2024. The broader EU unemployment rate remained stable at 6.0% in November 2025 compared to October, though it rose from 5.8% a year earlier.

    The Hamburg Commercial Bank (HCOB) released the final December figures for the Eurozone’s Services and Composite Purchasing Managers’ Indexes (PMIs). The data showed a twelfth consecutive monthly increase in private sector activity, with the Composite PMI at 51.5, down from 52.8 in November. Services output also declined to 52.4 from 53.6, marking three-month lows for both indicators.

    Regarding inflation, Germany’s preliminary December Harmonized Index of Consumer Prices (HICP) increased 2% year-over-year, lower than November’s 2.6% and below the 2.2% forecast. Monthly inflation rose by 0.2%, half the expected 0.4%. The Eurozone’s overall HICP inflation matched expectations at 2% annually, with a 0.2% monthly rise following November’s 0.2% decline.

    Germany reported mixed figures for November, with retail sales falling 0.6% while industrial production saw a modest 0.8% increase.

    On monetary policy, European Central Bank (ECB) Vice President Luis de Guindos told Bloomberg that current interest rates are appropriate as inflation targets have been met, though uncertainty remains high. This aligns with the ECB’s current stance: pausing rate changes while maintaining vigilance.

    U.S. Employment and Economic Growth Update

    The U.S. macroeconomic calendar was busy with key data mostly signaling progress. The Institute for Supply Management (ISM) reported December Manufacturing PMIs, showing a contraction in manufacturing output as the index fell to 47.9 from 48.2 in November, below expectations of 48.3. However, the Employment Index improved slightly to 44.9 from 44, while the Prices Paid Index remained steady at 58.5. Meanwhile, the Services PMI rose to 54.4 from 52.6, with the employment sub-index increasing to 52 from 48.9 and the Prices Paid Index easing to 64.3 from 65.4.

    The trade deficit narrowed sharply to $59.1 billion in October, down from $78.3 billion, reflecting the impact of Trump’s policies.

    Employment data was mostly positive. The ADP report showed private sector job growth of 41,000 in December, a bit below the expected 47,000 but an improvement over November’s revised -29,000. The JOLTS report recorded 7.146 million job openings at November’s end, down from 7.449 million in October. Job cuts announced in December dropped 50% from November to 35,553, the lowest monthly total since July 2024.

    The December Nonfarm Payrolls (NFP) report showed 50,000 new jobs added, below the 60,000 forecast, while the unemployment rate fell to 4.4%, better than the anticipated 4.5%. November’s payrolls were revised down to 56,000 from 64,000. This data put some short-term pressure on the USD but did not alter the Federal Reserve’s cautious monetary policy.

    The Fed cut interest rates by 25 basis points in December as expected, signaling the possibility of one more cut in 2026—less than markets hope but consistent with a cautious stance focused on employment. Market watchers anticipate at least two rate cuts this year, especially with Chairman Jerome Powell’s term ending in May and a likely replacement aligned with Trump’s preference for more aggressive easing. Still, no immediate Fed action is expected in the first meeting of 2026.

    What’s coming up next on the agenda?

    In the days ahead, attention will turn to U.S. inflation data, with the December Consumer Price Index (CPI) scheduled for release on Tuesday, followed by the Producer Price Index (PPI) for October and November on Wednesday. November Retail Sales data will also be published on Wednesday. These reports are expected to influence the Federal Reserve’s future policy decisions and, consequently, the direction of the U.S. Dollar.

    EUR/USD technical analysis

    From a technical standpoint, the daily chart shows a bearish outlook for EUR/USD with potential for further decline. The 20-day Simple Moving Average (SMA) is trending downward but still sits above the 100- and 200-day SMAs, indicating weakening short-term momentum. The price remains below the 20-day and 100-day SMAs at 1.1733 and 1.1666 respectively, while the rising 200-day SMA at 1.1571 acts as support. The Momentum indicator has dropped below its midpoint, maintaining strong bearish momentum, and the Relative Strength Index (RSI) is falling toward 36, suggesting lower prices ahead. A close above the 100-day SMA at 1.1666 could relieve some selling pressure and target the 20-day SMA at 1.1733, but failure to break this resistance leaves the pair vulnerable to test the 200-day SMA support at 1.1571.

    On a broader scale, the weekly chart also points to continued bearishness. The pair trades beneath the flattened 20-week SMA near 1.1665, with upside limited by this level. The 100- and 200-week SMAs are rising at 1.1085 and 1.0856 but remain far below the current price, so they are less relevant short term. The Momentum indicator on the weekly chart has turned downward but stays within neutral territory, while the RSI is declining around 52.

    If the pair falls below the key 1.1600 level, the next significant support lies near 1.1470, a major long-term pivot. Overall, bears will maintain control as long as EUR/USD stays below the 1.1740-1.1750 resistance zone.

    Sources: Fxstreet

  • EUR/USD Price Forecast: The pair is trading near 1.1700 following a rebound off the 50-day EMA

    • EUR/USD is likely to find immediate support around the 50-day EMA at 1.1684.
    • The 14-day Relative Strength Index (RSI) at 47 indicates neutral momentum with weakening strength.
    • Initial resistance is expected near the nine-day EMA at 1.1724.

    EUR/USD recovers after three consecutive days of losses, trading near 1.1700 during Wednesday’s Asian session. Technical analysis on the daily chart suggests a possible bearish bias, with the 14-day Relative Strength Index (RSI) at 47 indicating neutral but fading momentum.

    The pair remains above the rising 50-day Exponential Moving Average (EMA) but stays below the nine-day EMA, which acts as resistance. While the overall trend stays positive as long as it holds above the medium-term average, failure to break above the short-term EMA could keep the recent pullback in place.

    The EUR/USD pair may retest its immediate support at the 50-day EMA of 1.1684. A close below this level would weaken medium-term momentum and likely push the pair down toward the monthly low of 1.1589, established on December 1.

    On the upside, the pair could aim for the nine-day EMA at 1.1724, followed by the three-month high of 1.1808, reached on December 24. A sustained move above these levels would strengthen short-term momentum and pave the way toward 1.1918, the highest point since June 2021.

    EUR/USD: Daily Chart

    Sources: Fxstreet

  • EUR/USD slips as weak Eurozone data pressures the euro, with markets awaiting US jobs figures

    EUR/USD retreats toward 1.1710 after being rejected near 1.1740, giving back recent gains as downward revisions to Eurozone PMIs and softer German inflation renew selling pressure on the euro. With investors now awaiting key US labor market data, expectations for Federal Reserve monetary policy remain a major driver for the euro dollar exchange rate.

    EUR/USD trades in a volatile market on Tuesday, hovering around 1.1710 at the time of writing, down 0.15% on the day. The pair has surrendered earlier gains as weaker Eurozone economic data revives concerns over the region’s growth outlook.

    Selling pressure on the euro intensified after the downward revision of the Eurozone HCOB Services Purchasing Managers Index (PMI). The index was revised to 52.4 for December, below the preliminary estimate of 52.6 and down from 53.1 in November, signaling a slowdown in services sector activity—one of the main drivers of the European economy.

    Meanwhile, German inflation data released on Tuesday point to a clear easing in price pressures. Annual CPI inflation slowed to 1.8% in December from 2.3% in November, while the Harmonized Index of Consumer Prices (HICP) dropped to 2.0% from 2.6%, coming in below market expectations. These readings reinforce expectations of a more subdued inflation environment across the Eurozone, limiting near-term upside for the euro.

    On the US front, economic releases have also added to volatility in EUR/USD trading. The Services PMI was revised down to 52.5 in December, its lowest level in eight months, while the Composite PMI slipped to 52.7. According to S&P Global, softer demand, weaker new orders, and slower employment growth signal that the US economy is losing momentum, even as cost pressures remain elevated.

    As a result, expectations for US monetary policy remain a key driver of the euro-dollar pair. Fed Governor Stephen Miran said on Tuesday that upcoming data are likely to support further interest rate cuts, arguing that the Federal Reserve could lower rates by more than 100 basis points this year as current policy remains restrictive and continues to weigh on economic growth.

    Overall, EUR/USD continues to trade amid mixed macroeconomic signals from both sides of the Atlantic. With no clear near-term catalyst, price action remains uneven, while investors now turn their focus to upcoming US labor market data to better gauge the timing of potential Federal Reserve easing and the short-term direction of the US dollar.

    Sources: Fxstreet

  • Weekly Market Outlook: Calm Start to the New Year as US Dollar Holds Steady Ahead of Key Data

    Financial markets extended the holiday-thinned mood on the first trading day of the new year, with investors largely staying on the sidelines. Markets remain in a wait-and-see mode ahead of a data-heavy week.

    The US Dollar Index (DXY) traded near the 98.40 area on Friday, paring a significant portion of its New Year losses.

    Gold (XAU/USD) traded around the $4,320 level, surrendering all intraday gains following the New Year’s break. Expectations of lower US interest rates and elevated geopolitical tensions have continued to support precious metals in recent sessions.

    EUR/USD hovered near 1.1740 after edging lower earlier in the week, remaining under pressure as investors await upcoming economic data.

    GBP/USD traded close to the 1.3480 area, little changed during the first US session of the year.

    USD/JPY hovered around the 156.50 region, trading slightly lower on the day with limited intraday movement.

    AUD/USD traded near the 0.6690 area on Friday, posting modest gains after paring nearly half of its intraday advance.

    Key Economic Data Ahead: Upcoming Releases Set to Shape Market Sentiment

    Over the coming days, investors will closely watch US employment figures and global inflation data, which are expected to influence central bank policies.

    • Monday: The US Institute for Supply Management (ISM) releases the Manufacturing Purchasing Managers’ Index (PMI) for December.
    • Tuesday: Germany’s Harmonized Index of Consumer Prices (HICP) and Australia’s Consumer Price Index (CPI) are scheduled for publication.
    • Wednesday: The US ADP Employment Change report (December), ISM Services PMI (December), and the preliminary Eurozone HICP (December) will be released.
    • Thursday: The US Trade Balance for October and Consumer Credit data for November are due.
    • January 9: The highly anticipated US Nonfarm Payrolls (NFP) report for December and the preliminary January Michigan Consumer Sentiment Index will be published.

    These releases are expected to set the tone for market direction and provide clues on the pace of monetary tightening by major central banks.

    Sources: Fxstreet