EUR/USD Starts Week Firm, Bulls Eye Key Resistance Levels
EUR/USD edged higher Monday, gaining 0.2% to trade within a 1.0266-1.0292 range as the dollar softened slightly and Asian stocks rallied. Market sentiment remains cautious as traders prepare for a potentially turbulent week, with German PPI data, an ECB policy debate, and heightened expectations for U.S. volatility tied to President Trump’s inauguration and planned executive actions. ECB official Isabel Schnabel’s remarks about the pace and extent of rate cuts have added to the mix, as the eurozone balances economic recovery with monetary easing.
Technical Analysis
Technically, EUR/USD is consolidating within a broader downtrend. The pair faces immediate resistance at Wednesday’s 1.0354 high, followed by the January 6 high of 1.0437. Support lies at 1.0195, the 61.8% Fibonacci retracement of the 2022-2023 rise, and the 2025 base at 1.0177. Daily momentum studies remain neutral, while 5-, 10-, and 21-day moving averages continue to coil, reflecting consolidation within a bearish framework. Bulls need a close above 1.0437 to signal a shift in momentum and challenge the prevailing downtrend.
Market Outlook
Upcoming events will likely drive EUR/USD volatility. Trump’s expected executive actions could spark market turbulence, while eurozone data and ECB commentary may influence sentiment. Option-related levels at 1.0250 (€657 million) and 1.0300 (€2.255 billion) could anchor price action in the short term. For bulls to gain confidence, a sustained break above 1.0354 is needed, while a failure to hold above 1.0195 would reinforce the bearish bias and open the door for further declines toward 1.0177.