The EURUSD currency pair has been showing decline since Friday. EURUSD decreased by 0.84% to $1,02120, updating its two-year minimum. Investors remain concerned that the EU currency will fall to the critical level of $1 due to tariffs uncertainty.
The US dollar index is showing strengthening, continuing to trade above 109. This growth was facilitated by the US nonfarm payrolls released on January 10. In December 2024 256,000 new jobs were created in the US economy, which became the largest gain in nine months. This positive figure had a significant impact on the market, since a rising number of jobs is usually indicative of a stronger economy and might be a reason for the Federal Reserve to raise interest rates.
The future policy of Donald Trump, who will return to the White House on January 20, is causing pressure in the market. His policy is expected to both contribute to economic growth and intensify price pressure. In particular, Trump is considering declaring economic emergency, which would allow him to impose a wide spectrum of trade tariffs on both allied and adversary countries of the US. This creates additional risks for Europe.
In the near term, the market's attention will be focused on two events. Firstly, the release of the US Employment Trends Index is due on January 13. Secondly, European Central Bank (ECB) Supervisory Board member Lane is scheduled to deliver a speech on Tuesday, January 14. The speech may clarify the ECB's current sentiment on further interest rate cuts.
The technical analysis confirms the prevalence of bearish sentiment in the market.
Considering the facts, the main recommendation for now is to sell EURUSD at the current price. Place a Take Profit at the level of 1.015 and a Stop Loss at the level of 1.02490.
This content is for informational purposes only and is not intended to be investing advice.
