EUR/USD price retreats by 0.6% ahead of upcoming U.S. job report
EUR/USD rally falters at 1.0458, retreats to 1.0418 amid tariff uncertainty.
The EUR/USD pair broke past a crucial resistance point of 1.0436 to 1.0458 yesterday, but the rally was short-lived, as the pair retreated by 0.6% from its peak.
It is now trading at 1.0418 during today’s European session. This price action comes amid key macroeconomic and political developments, setting the stage for a defining moment in the currency pair’s near-term outlook.
The 1.0458 level, tested multiple times over the past four weeks, has become a significant barrier for EUR/USD, forming quadruple tops. This suggests strong market resistance at this price point, with further movement dependent on how well this resistance holds. The level aligns closely with the 50-day exponential moving average (EMA), reinforcing its importance as a key technical level.
EUR/USD price dynamics (October 2024-January 2025). Source: TradingView.
President Trump’s tariff strategy, which appears more gradual than anticipated, has added uncertainty to market sentiment. ECB President Christine Lagarde commented that Trump’s selective tariff approach, rather than blanket levies, might be more effective in achieving desired outcomes. Lagarde emphasized the need for Europe to prepare for selective tariffs, which could lead to increased volatility, including in the EUR/USD pair.
EUR/USD price near-term outlook to be influenced by unemployment claims
Today, attention turns to the release of U.S. unemployment claims, a crucial economic indicator that could impact the direction of the market. A reading lower than expected could provide further support for the USD, particularly with the labor market showing signs of strength. These data points, along with President Trump’s tariff approach, could influence EUR/USD’s short-term outlook.
The relative strength index (RSI) above 50, indicates that the pair is in bullish territory. The RSI is not yet in overbought conditions, suggesting there is still room for a potential rally. However, any sustained break above 1.0458 will likely depend on broader market sentiment and economic data.
The EUR/USD pair declined to 1.039 after the U.S. dollar’s strength continued to weigh on the euro. President Trump’s recent tariff comments on the European Union added further pressure.
