EUR/USD Analysis Summary Today
- Overall Trend: Bearish.
- Support Levels for EUR/USD Today: 1.1580 - 1.1500 - 1.1420
- Resistance Levels for EUR/USD Today: 1.1680 - 1.1730 - 1.1800
EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1560 with a target of 1.1820 and a stop-loss at 1.1470.
- Sell EUR/USD from the resistance level of 1.1710 with a target of 1.1500 and a stop-loss at 1.1780.
Technical Analysis of EUR/USD Today:
The Euro has failed to maintain its recent gains against the US Dollar amid diverging market expectations for central bank policies. Despite the Federal Reserve moving forward with interest rate cuts, the EUR/USD pair has recently faced selling pressure. According to reliable trading platforms, the pair collapsed last week toward the 1.1618 support area—its lowest level in a month—before closing the week steadily around 1.1632. It is likely to remain within this bearish range until the details of US inflation data are released later this week.
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On the US Dollar side, following the reaction to US jobs data, financial markets now expect the Federal Reserve to keep its monetary policy unchanged until mid-2026. This caution regarding further Fed cuts is supporting US bond yields and the Dollar's price.
Euro Support Remains Limited
In the Forex markets, the Euro (EUR) received only limited support from positive German Factory Orders data. Figures from the German Federal Statistical Office (Destatis) showed that factory orders rose by 5.6% in November, following a 1.6% rise in October, far exceeding expectations of a 1% contraction. A large part of this increase is attributed to defense sector orders, reflecting pan-European efforts to bolster military capabilities.
For euro investors, this data offered a rare glimmer of hope, suggesting that Germany’s prolonged industrial downturn may be showing early signs of stabilization. However, the euro’s gains were limited. Persistent concerns about European security, linked to the ongoing war in Ukraine and renewed worries about US ambitions in Greenland, continued to weigh on sentiment. The euro also fell due to the latest Eurozone economic sentiment indicator, which dropped sharply more than expected to a three-month low in December.
Technical Outlook for EUR/USD Today:
There is no doubt that the EUR/USD pair has turned bearish as it approaches the 1.1600 support level. A break below this level would mean a rapid decline to the psychological support zone of 1.1500, a crucial area that confirms the technical indicators have reached strong oversold levels. Currently, the 14-day Relative Strength Index (RSI) is around 37, supporting the bearish outlook. Similarly, the MACD indicator is also trending downwards. However, based on the daily chart, the psychological resistance level of 1.1800 remains the most important level to confirm a bullish trend reversal.
We expect the EUR/USD to continue its narrow downward range until the markets and investors react to the release of US inflation figures – the Consumer Price Index (CPI) and the Producer Price Index (PPI) – as well as US retail sales figures, along with a series of statements from Federal Reserve officials.
Trading Advice:
Traders recommend waiting for strong selling pressure to exhaust itself before considering new buying positions. Avoid excessive risk regardless of how attractive entry levels may seem.
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