Positive Euro Area reports and overall U.S. dollar weakness helped prop EUR/USD higher from its weekly lows.
The pair is now testing a key resistance zone, which ups the percentages of EUR/USD extending a longer-term trend.
We’re taking a more in-depth have a look at the pair’s 4-hour time-frame!
EUR/USD 4-hour Forex Chart by TradingView
In case you missed it, service PMI reports from the Euro Area generally improved from November to December, with readings from Germany, France, and the Euro Area also surpassing their initial estimates.
On the flip side, the U.S. dollar struggled despite Treasury yields hitting fresh multi-month highs, as traders grappled with start-of-year risk-taking and uncertainty around President-elect Trump’s tariff plans.
Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. For those who haven’t yet done your homework on the euro and the U.S. dollar, then it’s time to examine out the economic calendar and stay updated on every day fundamental news!
EUR/USD kicked off the yr about 20 pips shy of 1.0200 but quickly rallied to the 1.0430 area, brushing against the R1 (1.0437) Pivot Point.
Interestingly, the realm also lines up with the 4-hour chart’s 100 SMA and a trend line resistance that’s been solid since late September 2024.
Will the consolidation on the resistance zone attract enough sellers and extend EUR/USD’s longer-term downtrend?
Look out for bearish candlesticks closing below 1.0400, which could encourage EUR sellers to pull EUR/USD back all the way down to its 2025 lows and even recent monthly lows in the following few days.
But when the pair prints bullish candlesticks and breaks above the 1.0450 psychological level, it could attract buyers and spark a bullish reversal.
What do you think that? Which way will EUR/USD go in the following trading sessions?
Whichever bias you find yourself trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that might influence overall market sentiment!