EUR/USD price stalls below 1.0400 as holiday season lowers market volatility
EUR/USD struggles below 1.0400 as bearish trend points to further declines in 2025
EUR/USD price has been caught in a tight range, with price action staying subdued below the 1.0400 level due to the holiday lull. Despite recent attempts by bulls to push the pair higher, the overall trend remains bearish as we approach the end of 2024.
Last week, after the price dipped below the 1.04600 support level and tested the previous November lows near 1.0330, EUR/USD briefly saw a recovery attempt as bulls tried to challenge the 1.04600 resistance once again. However, the market's performance this week has been less than compelling, with EUR/USD failing to break above the 1.0400 level, stalling under its weight. This price action has been compounded by low volatility in the Forex market due to the Christmas and boxing holiday , leading to a further lack of market direction.
EUR/USD price dynamics (September-December 2024). Source: TradingView.
EUR/USD price outlook indicates downtrend to persist into 2025
Throughout the fourth quarter, EUR/USD has been guided by a consistent bearish trendline, as the pair struggles to maintain any upward momentum. As we near the final week of the year and transition into 2025, the outlook for EUR/USD remains tilted to the downside. The market's inability to clear the 1.0400 level further validates this bearish sentiment, with RSI indicating a lack of upside momentum, currently sitting below the 50 mark. This suggests the potential for further declines, as the momentum shifts increasingly in favour of the downside.
As investors await the US Initial Jobless Claims data, expected to show a slight drop to 218K from 220K, market focus will be on any surprises in the figures. Given the light economic calendar in the US, any deviation from expectations could add fuel to the USD’s strength, putting further pressure on EUR/USD. The downtrend that has characterized the fourth quarter is poised to continue into 2025, with the next key support level around the 1.0330 region.
EUR/USD price slipped by 0.6% on Monday, December 23, moving from 1.0445 to 1.0385 due to weak market conditions. The bearish sentiment surrounding the Euro was driven by dovish expectations regarding the ECB's future policy actions.
