EUR/USD price rises 0.5% but faces hurdle at 1.0331 as RSI stays bearish
EUR/USD gains 0.5% but struggles to break resistance at 1.0331
The EUR/USD currency pair has posted gains of 0.5% in Monday’s trading session, climbing from 1.0267 to 1.031.
However, the market remains constrained by significant resistance levels, and the outlook suggests that further downside pressure could emerge in the near term.
As the European session unfolds today, January 20th, EUR/USD finds itself struggling below the critical last year's low of 1.0331, which has acted as a strong resistance point for the past three trading days of last week. The level is reinforced further by the 100-period Exponential Moving Average (EMA) on the 4-hour chart, indicating that a firm cap remains in place for the pair.
EUR/USD price dynamics (November 2024-January 2025). Source: TradingView.
Despite the initial rise in the European session, the daily Relative Strength Index (RSI) remains firmly in bearish territory, highlighting a lack of bullish momentum in the market and continuing struggle to break through resistance levels.
Trump potential policy changes to complicate EUR/USD outlook
Reports suggest that Trump may soon declare a national emergency, which could trigger policies aimed at boosting domestic energy production and reversing climate change measures set by the Biden administration. In addition, Trump’s plans to sign over 200 orders on his first day in office, covering tax cuts, immigration policies, and import tariffs, have the potential to lift inflationary pressures and growth expectations in the U.S. This scenario, while initially weakening the Dollar, could ultimately support the Greenback by driving inflation expectations higher, making the outlook for EUR/USD more uncertain.
Looking ahead, the immediate focus will be on whether EUR/USD can break above the 1.0331 resistance. However, A move below the current price of 1.031 could signal further downside, potentially targeting lower levels as the market digests the U.S. political situation.
The euro faced pressure due to expectations of further rate cuts by the ECB meeting. EUR/USD traded below the 1.03 mark, with the broader bearish trend continuing to dominate.
