🔍 1. Fundamental Analysis
🇺🇸 United States
Powell criminal investigation shocks USD stability
A major driver this week is the revelation that federal prosecutors opened a criminal investigation into Fed Chair Jerome Powell, raising fears about Fed independence and triggering an immediate wave of USD selling as investors questioned policy credibility.
This uncertainty has created a short term bullish impulse for EURUSD, but analysts warn this effect may fade quickly.
US Economic Data in Focus
• US CPI (Tuesday): Expected 2.7% YoY, same as previous month; MoM +0.3% expected for both headline and core.
• Retail Sales: Also key, especially after last week’s mixed NFP report—job gains slowed and unemployment dynamics remain uncertain.
Tariff and geopolitical backdrop
• Supreme Court ruling on Trump’s tariffs may land this week. A negative ruling for Europe could strengthen USD.
• The Greenland annexation threat from the US remains a major downside risk for EUR, with possible long-term implications.

🇪🇺 Eurozone Fundamentals
The euro enters the week with very little economic data scheduled.
• Markets expect no meaningful statements from ECB speakers this week.
This leaves EURUSD entirely driven by USD-side news, making the euro reactive rather than directional.

📊 2. Technical Analysis
Short-Term Structure
• EURUSD is forming a corrective upward wave from the 1.1660 zone.
• H4 chart shows an Inverted Hammer reversal pattern, indicating a possible bounce.
Key Resistance Levels
• 1.1710: First upside target; breakout could open room for more gains.
• 1.1832–1.1850: Major resistance zone—EURUSD previously rejected from here and entered consolidation. This remains the medium term ceiling.
Key Support Levels
• 1.1660: Current structural pivot; losing it reopens downside.
• 1.1640: Bearish extension target before potential reversal.
• 1.1600 → 1.1500: Fed independence fears fading could trigger a USD recovery and push EURUSD to these targets.
Indicators (Daily/Weekly)
• Weekly trend: Consolidation after failing at 1.1850.
• Technical sentiment (Investing.com, Jan 2026):
o Daily: Strong Buy
o Weekly: Strong Buy
o MA Summary: Buy (9 Buy, 3 Sell)
o RSI: 59.5 (bullish)

📈 3. Trading Scenarios
Bullish Scenario (Short Term Bounce)
• Entry: Above 1.1685–1.1700
• Target 1: 1.1710
• Target 2: 1.1750–1.1780 (if USD uncertainty persists)
• Invalidation: Break below 1.1640
• Catalysts:
o Powell investigation intensifies
o Weak US CPI or retail data
o Improved risk sentiment

Bearish Scenario (Primary Medium Term Bias)
• Entry: Below 1.1660
• Target 1: 1.1640
• Target 2: 1.1600
• Target 3: 1.1500 (if USD strengthens on tariff ruling or CPI beats expectations)
• Invalidation: Break above 1.1710
• Catalysts:
o USD stabilizes after Fed independence fears fade
o CPI comes in hot → Rate cut expectations weaken
o Supreme Court tariff ruling favoring the US

🧠 4. Market Sentiment Overview
• Short-term sentiment: Tilted neutral–bullish due to Powell investigation.
• Medium-term sentiment: Bearish due to stalled uptrend at 1.1850 and limited euro catalysts.
• Long-term: Euro outlook improving gradually due to narrowing Fed–ECB policy gap.