1. Fundamental Analysis
🇺🇸 United States
Strong U.S. Data Supports the Dollar
• U.S. jobless claims came in significantly below expectations, reinforcing labor market strength and pushing rate cut expectations out to June or later.
This shift supported broad USD demand.
• U.S. industrial production data for December was also stronger than expected, yet markets largely ignored it due to geopolitical focus.
Trade & Geopolitics: Tariff Shock
• The Trump administration announced new tariffs on eight European countries, sparking global risk aversion.
• Despite tariffs typically being USD positive, markets reacted with a “Sell America” rotation, causing EURUSD to rise briefly after the news.
Fed Uncertainty
• Markets are watching who will replace Jerome Powell; Kevin Warsh is viewed as the leading candidate, which could be modestly USD supportive.
Overall, the fundamentals tilt bearish EURUSD, with U.S. data overshadowing any temporary tariff driven USD selling.

🇪🇺 Eurozone
Inflation Drops Below ECB Target
• December CPI fell to 1.9% YoY, below the ECB’s 2% target.
This may pressure the ECB toward future easing, which is EUR negative.
Eurozone Data Sluggish
• No significant economic releases this week; euro remains driven primarily by U.S. macro and geopolitics.
Political Tension: Greenland Issue
• Trump’s renewed push for Greenland annexation escalates EU–US tensions, adding uncertainty but not providing meaningful EUR support.

2. Technical Analysis
Trend Structure
• EURUSD remains in a descending channel.
• After failing to sustain above 1.1800–1.1820 in December, the pair has established consistent lower highs.
Indicators
• MACD: Negative
• Stochastics: Oversold but weak
• Price: Trading below the midline of Bollinger Bands
FX.co Wave Structure
• The pair remains in a corrective downside wave, with a further bearish extension possible unless price breaks above 1.1700.

Key Support Levels
• 1.1550 → Primary weekly support zone
• 1.1535 → Expected test for this week (bullish rebound possible)
• 1.1485 → Breakdown confirmation; opens move toward 1.1255

Key Resistance Levels
• 1.1650 – 1.1680 → First meaningful resistance (Fibonacci cluster)
• 1.1700 – 1.1750 → Must reclaim to shift sentiment neutral/bullish
• 1.1775 → Triangle pattern breakout confirmation

3. Trading Scenarios
Bullish Scenario (Lower Probability)
Trigger: Break & close above 1.1650–1.1680
• Targets:
o 1.1700
o 1.1750
o 1.1805 (Roboforex short term target)
• Stop: Below 1.1580
Rationale:
Tariff tensions and political risk weaken the dollar short term.

Bearish Scenario (Primary Expectation)
Trigger: Sustained trading below 1.1600
• Targets:
o 1.1550
o 1.1535
o 1.1485 → Breakdown toward 1.1255
• Stop: Above 1.1700
Rationale:
Strong U.S. labor data, rising Fed rate cut delays, weakening Eurozone inflation.

4. Market Sentiment
• USD sentiment: Supported by strong macro data
• EUR sentiment: Pressured by falling inflation and slow growth
• Geopolitics: Adds noise but doesn’t shift the underlying bearish bias
• Overall: EURUSD likely remains under pressure, unless risk off sentiment intensifies enough to weaken the USD materially.