EUR/USD Rallies to 1-Month High, Bulls Eye Break of 1.0600 Resistance
EUR/USD surged to a 1-month high on Friday, driven by easing trade tensions, weaker U.S. data, and improving eurozone sentiment. President Trump’s tempered comments on tariffs against China lifted risk appetite, boosting China's yuan and the euro due to Europe’s economic dependence on Chinese growth. Meanwhile, U.S. January S&P Global PMI hit a 9-month low, and the University of Michigan sentiment index was revised lower, with 5-year inflation expectations also edging down. Conversely, eurozone January PMI beat expectations, returning to expansion territory at 50.2. These factors, coupled with tighter German-U.S. yield spreads, provided support for EUR/USD, which closed up +0.84% near 1.0505.
Technical Analysis
Technicals favor further upside for EUR/USD. The pair broke above the 5- and 55-day moving averages and the daily Ichimoku cloud base, reinforcing bullish momentum. Rising daily and monthly RSIs signal strong upward momentum, while the formation of a massive January bull hammer underscores the potential for sustained gains. Immediate resistance lies in the 1.0600/30 zone, which, if broken, could pave the way for a test of 1.0925. Support is at 1.0464 (Friday’s low), followed by the 1.0400 psychological