1. Fundamental Analysis
🇺🇸 United States
Dollar Softness Driven by Geopolitics
• The Trump administration’s rhetoric regarding Greenland increased geopolitical uncertainty and pressured USD sentiment.
• Concerns emerged that Europe could leverage its large U.S. asset holdings in negotiations, further weighing on the dollar.
A Danish pension fund even announced divestment from U.S. Treasuries.
Fed Policy Outlook
• November PCE inflation came in exactly as expected (0.2% m/m, 2.8% y/y), reinforcing expectations that the Fed will hold rates steady at its January 28 meeting.
Impact on EURUSD:
USD weakness + steady Fed = slightly bullish tone for EURUSD.

🇪🇺 Eurozone
Market Leans Toward EUR Strength
• European positioning improved due to USD weakness, though not on the back of strong Eurozone data.
The move is primarily USD-driven, not EUR-driven.
Geopolitical Backdrop
• Early-week tariff threats from Washington against several European countries were softened after a framework cooperation agreement with NATO, but lack of clarity keeps volatility elevated.
Impact on EURUSD:
Geopolitical ambiguity drives safe haven flows out of USD into a broader basket, indirectly supporting EURUSD.

2. Technical Analysis
Trend Structure
• EURUSD continues to trade inside a broad sideways channel between 1.1575 and 1.1800, currently leaning bullish as it tests the upper zone.
Indicators
• Bollinger Bands: Flattening → signalling consolidation
• MACD: Near zero → neutral momentum
• Stochastics: Overbought → caution for near term pullback
Immediate Technical Outlook
• Holding above 1.1740–1.1760 maintains bullish pressure.
• A break and close above 1.1800–1.1825 would confirm a bullish continuation.
• A drop below 1.1600 increases the probability of a deeper correction toward 1.1575 and potentially lower.

Key Support Levels
• 1.1650 → Main weekly support
• 1.1600–1.1575 → Critical zone; break here reopens downside
Key Resistance Levels
• 1.1800–1.1825 → Must break for bullish continuation
• 1.1975 → Major resistance (triangle upper boundary per alternate models)

3. Trading Scenarios
Bullish Scenario (Moderately Likely)
Trigger:
Break & daily close above 1.1800–1.1825
Targets:
• 1.1880
• 1.1975
• Extension: 1.2395 (triangle breakout projection)
Rationale:
USD weakness driven by geopolitical uncertainty + EURUSD trading near upper range boundary.

Bearish Scenario (Alternative)
Trigger:
Sustained move below 1.1600–1.1575
Targets:
• 1.1545 (triangle lower boundary)
• 1.1465
• Extension: 1.1245 if breakdown accelerates
Rationale:
Downside activated if risk sentiment swings back in favor of USD or Fed unexpectedly turns hawkish.

4. Market Sentiment
• USD Sentiment: Weak due to geopolitics and asset diversification concerns
• EUR Sentiment: Gradually improving but still driven by USD weakness rather than Eurozone strength
• Risk Appetite: Volatile — traders sensitive to headlines around Greenland, NATO, and U.S.–EU relations
• Technical Bias: Tilted bullish but capped until 1.1800+ break