EUR/USD Resilient Despite Trump Tariff Refutation, Focus Shifts to U.S. Data
EUR/USD swung widely on Monday, rallying to a four-session high of 1.0437 on a Washington Post report suggesting a narrower U.S. tariff strategy before retreating to 1.0355 after President-elect Donald Trump refuted the report as "Fake News." Despite the pullback, the pair remained up +0.75% late in the session, buoyed by tighter German-U.S. spreads and stronger-than-expected eurozone data. Final revisions to December S&P PMIs came in higher than expected, and German inflation exceeded forecasts, supporting the euro. In contrast, downward revisions to U.S. PMIs and durable goods orders dampened the dollar.
Technical Analysis
Technically, EUR/USD exhibits a bullish tilt. The pair pierced its 21-day moving average during the rally, with rising RSI levels and a monthly bull hammer reinforcing positive momentum. Immediate resistance lies at Monday’s high of 1.0437, followed by stronger barriers near 1.0500. Support rests at 1.0355, Monday’s low, with further protection at the 1.0300 psychological level. A sustained move above 1.0437 would signal further upside, while a break below 1.0355 could trigger additional selling pressure.
Focus on U.S. Data Risks
Traders now turn their focus to U.S. data risks this week, including November JOLTS, December ISM manufacturing PMI, and the December jobs report. Data pointing to slowing U.S. jobs and economic growth could amplify expectations of deeper Fed rate cuts, narrowing spreads further and supporting EUR/USD. Conversely, stronger-than-expected U.S. data could stall the euro’s rally, keeping the pair range-bound between 1.0355 and 1.0437.
