EUR/USD Price Forecast: Can $1.1593 Hold as the Market’s Next Make‑or‑Break Level?
During the European session, EUR/USD finally caught a break, bouncing toward $1.1620 after several weeks of pressure...
Quick overview
- EUR/USD bounced toward $1.1620, breaking a three-week losing streak despite strong US economic data.
- The Federal Reserve is expected to maintain interest rates, keeping the dollar favorable in the near term.
- Eurozone inflation eased to the ECB's target, providing support for the euro and reducing pressure on households.
- Technical analysis shows EUR/USD facing resistance at $1.1636, with potential short trade opportunities below $1.1590.
During the European session, EUR/USD finally caught a break, bouncing toward $1.1620 after several weeks of pressure. The move came even as US data stayed strong, which normally favors the dollar. Instead, a softer greenback gave the euro room to breathe, helping the pair pause its three-week losing streak.
The backdrop is still dollar-friendly. Markets expect the Federal Reserve to keep interest rates unchanged in the near term, with no rush toward cuts. That keeps rate differentials tilted in favor of the US, even as the euro shows short-term resilience.
US data stays hot, but euro holds its ground
Fresh US numbers painted a solid picture. Initial Jobless Claims dropped to 198K in the week ending January 10, beating expectations of 215K and improving on the prior 207K. That eased worries about any sudden cooling in the labor market.
Manufacturing also surprised to the upside. The New York Empire State Manufacturing Index climbed to 7.7 in January versus forecasts of 1, while the Philadelphia Fed Manufacturing Survey jumped to 12.6 from -8.8, smashing expectations of -2.
Fed officials reinforced the “higher for longer” message. Raphael Bostic and Jeffrey Schmid both signaled that policy needs to stay restrictive as inflation remains above comfort levels, keeping investors cautious about near-term rate cuts.
Eurozone inflation cools, offering support
On the European side, inflation data gave the euro a subtle lift. Germany’s consumer inflation eased to the European Central Bank’s 2% target in December, down from 2.6% in November. On a monthly basis, prices rose just 0.2% after a 0.5% decline the month before.
That slowdown doesn’t scream urgency for ECB hikes, but it does reduce pressure on households and supports a more stable outlook for the euro. For traders, it’s a reminder that not all the macro momentum belongs to the US.
EUR/USD Technical Setup and Trade Idea
On the 4-hour chart, EUR/USD is trading near $1.1615, carving out a descending triangle with lower highs pressing into horizontal support around $1.1593. The latest candle shows rejection near $1.1623, signaling that sellers are still defending that zone. Price sits below both moving averages, keeping the short-term bias tilted lower, while RSI near 38 suggests weakness but not a confirmed reversal.
Trendlines outline a downward channel, and Fibonacci levels from the recent swing high highlight $1.1636 and $1.1655 as key resistance. Support zones to watch are $1.1593, $1.1555, and $1.1524. A clean break below $1.1593 could open the door toward $1.1550, while a strong bullish candle above $1.1636 would challenge the bearish structure.
- Key levels:
- Resistance: $1.1636, $1.1655
- Support: $1.1593, $1.1555, $1.1524
Trade idea: Consider a short below $1.1590, targeting $1.1550, with a stop above $1.1636.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save