Daily Price Outlook
EUR/USD is trading flat around 1.0400 in the European session ahead of the U.S. Nonfarm Payrolls (NFP) report at 13:30 GMT. The U.S. Dollar Index (DXY) is down 0.10% at 107.60.
Economists expect the U.S. to have added 170K jobs in January, down from 256K in December. The unemployment rate is expected to remain at 4.1%, which should keep the Federal Reserve (Fed) on hold for the near term. A strong jobs number will support the Fed’s stance, while a weak one could spark speculation on earlier rate cuts.
According to the CME FedWatch tool, traders are pricing in the first rate cut in June 2025. However, if the jobs report shows a softening labor market, expectations for a May rate cut could rise.
The Average Hourly Earnings data is also in focus, a key measure of wage growth and consumer spending power. Analysts predict year-over-year wage growth to slow to 3.8% from 3.9% in December, while monthly earnings to rise 0.3% in line with previous reports.
Eurozone Faces Uncertainty Amid U.S. Trade Threats
Despite EUR/USD being flat, the Euro is vulnerable to trade policy risks. Over the weekend, U.S. President Donald Trump said the Eurozone could face tariffs if they don’t buy enough American goods, escalating tensions between the two blocs.
Analysts at Macquarie noted that Trump didn’t specify the measures, but Europe is a “target-rich” zone for tariffs, especially with Germany and France in political turmoil. Any tariff escalation could hit Eurozone exports hard and growth.
Beyond trade risks, the Eurozone’s domestic economy is fragile. Concerns of stagnation have kept the European Central Bank (ECB) dovish. ECB board member Piero Cipolloni said on Thursday that there is “room to cut rates” and growth risks.
If Trump’s tariffs materialize, Cipolloni warned it could weaken the Eurozone economy. And if the U.S. imposes tariffs on Chinese goods, China could shift excess supply to European markets and create deflationary pressures.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.03746, down 0.08%, as the euro struggles to gain traction against a resilient U.S. dollar. Market sentiment remains cautious ahead of key economic data, with traders assessing the Federal Reserve’s rate trajectory and broader macroeconomic trends.
The pivot point at $1.03879 is a critical threshold for price action. If EUR/USD remains below this level, downside pressure is likely to persist. Immediate support is at $1.03383, with further declines potentially testing $1.02920 and $1.02467. A break below these levels would reinforce the bearish trend, increasing selling momentum.
On the upside, immediate resistance stands at $1.04339, followed by $1.04780 and $1.05222. If the pair manages to reclaim $1.03879, it could gain bullish traction, targeting these resistance levels. However, the broader trend remains weak, with selling pressure dominant below the pivot.
The 50-day EMA at $1.03549 suggests that EUR/USD is trading below key moving averages, reinforcing a bearish outlook. Short-term sentiment remains negative, with the pair struggling to gain upside momentum. If price action remains under $1.03879, further weakness is expected.
EUR/USD remains bearish below $1.03874, with a recommended sell entry at this level, targeting $1.03372 as a take-profit zone. A stop-loss at $1.04176 is advised to mitigate risk in case of a bullish reversal.
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