EURUSD stabilized near 1.0300 after rising during the previous session. The euro was supported by improving market sentiment amid reports that US President-elect Donald Trump's team is considering gradually increasing import tariffs. It built investors’ confidence and weakened the positions of the US currency.
Disappointing producer price index (PPI) data for December put pressure on the dollar. The annualized index was 3.3%, which is slightly below the consensus forecast of 3.4%.
Investors are focusing on the upcoming release of the US consumer price index (CPI). The index is expected to rise by 2.9% year-on-year (compared to 2.7% in November) and by 0.3% month-on-month. This data can clarify the future monetary policy of the Federal Reserve System (Fed).
According to the CME FedWatch Tool, the probability of one Fed interest rate cut in 2025 remains high, but is in contrast to the previous forecast of two cuts.
The European Central Bank (ECB) is shaping market’s expectations of further policy easing. According to the governor of the Bank of Finland Olli Rehn, the monetary policy course may change only by mid-summer 2025, adding more uncertainty in the region.
From the technical point of view, the EURUSD pair is still in a downtrend on the daily chart (D1). The quotes approaching the resistance channel may face increasing pressure. Bulls Power and Bears Power indicators (standard settings) remain negative, confirming the prevalence of bearish sentiment.
Signal:
The short-term outlook for EURUSD suggests selling.
The target is at the level of 1.0090.
Part of the profit should be fixed near the level of 1.0210.
The Stop loss could be placed at the level of 1.0440.
The bearish trend is of a short-term nature, so it’s suggested to limit the trading volume to no more than 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
