🔍 Fundamental Overview
• Fed vs. ECB divergence: Following the Fed’s 25 bps cut in mid-December and dovish commentaries, the USD remains under pressure. Meanwhile, the ECB is likely to hold rates steady, with markets anticipating potential tightening in 2026.
• US Data: Soft US macro indicators—rising jobless claims, weak ISM/PCE—are reinforcing the Fed’s easing stance and weakening the dollar.
• Eurozone Conditions: Eurozone inflation is stable and PMIs are improving; Germany’s industrial output rebound has eased recession fears.
• Key Catalysts This Week:
o ECB decision and commentary
o EU flash PMI and CPI reports
o US durable goods orders, consumer sentiment

📊 Technical Analysis
• Support Levels:
o 1.1650 – Weekly floor, previous consolidation zone
o 1.1700 – Short term support, also where MACD and price have bounced
• Resistance Levels:
o 1.1800 – Upper weekly pivot; pair recently touched this zone
o 1.1850–1.1860 – Extended breakout target in case of upside continuation
• Indicators:
o MACD: Staying positive after recent breakout rally
o Stochastic/RSI: Approaching overbought levels—consolidation likely before another move
o Price Action: Shifted into upper consolidation band 1.1650–1.1800; upward squeeze building for a breakout

📈 Trading Scenarios
✅ Bullish Setup:
• Entry: On a clean breakout above 1.1800
• Targets: 1.1850 ➡️ 1.1900
• Stop-Loss: Below 1.1750 or 1.1700
• Catalysts: ECB holds/firms stance, sustained USD softness
❌ Bearish Setup:
• Entry: On a breakdown below 1.1650
• Targets: 1.1600 ➡️ 1.1550
• Stop-Loss: Above 1.1700
• Catalysts: Hawkish Fed indications, strong US data surprises