The Euro surged to a multi-week high against the US Dollar on Friday, driven by expectations for preliminary January PMI reports. The pair's technical outlook suggests continued bullish momentum, but potential risks from US trade policy comments remain. Market participants will closely monitor both Eurozone and US economic data releases for further direction.
EUR/USD surged to a multi-week high surpassing 1.0450 on Friday, fueled by anticipation for preliminary January Manufacturing and Services PMI reports. The pair's near-term technical outlook suggests a strengthening bullish sentiment. Following Thursday's indecisive trading session, EUR/USD gained momentum, reaching its highest level since December 18 at 1.0470 in the early Euro pean session. Although it retreated to the 1.
0450 region, the technical picture indicates that the upward bias remains intact. This week, the Euro displayed the strongest performance against the US Dollar, according to the provided table showcasing percentage changes against major currencies. The table illustrates the Euro's relative strength against the US Dollar, British Pound, Japanese Yen, Canadian Dollar, Australian Dollar, New Zealand Dollar, and Swiss Franc. Market sentiment was positively influenced by US President Donald Trump's statement in an early Friday interview, expressing his preference to avoid imposing tariffs on China. This upbeat sentiment made it challenging for the US Dollar to find demand. However, Trump's comments at the World Economic Forum on Thursday, indicating his intention to address the trade deficit with the EU and highlighting the difficulties posed by EU tariffs on US products, introduced a potential downside risk for the Euro. Key economic indicators scheduled for release on Friday include preliminary January HCOB Manufacturing and Services PMI reports for Germany and the Eurozone. Market participants will closely monitor these data releases, as positive surprises are likely to support the Euro, while negative outcomes could lead to a decline. The US economic calendar features S&P Global PMI data in the second half of the day. Unexpectedly weak Composite PMI figures, dipping below 50 and signaling a contraction in private sector economic activity, might trigger renewed selling pressure on the US Dollar heading into the weekend.From a technical perspective, the 4-hour chart's Relative Strength Index (RSI) indicator is trending upwards towards 70, suggesting that EUR/USD has further room for upside movement before entering an overbought territory in the near term. Key resistance levels to watch include 1.0500-1.0510 (a round number and the 78.6% Fibonacci retracement of the recent uptrend), followed by 1.0540 (a static level) and 1.0600 (the beginning point of the downtrend). A retreat below 1.0440 (the 61.8% Fibonacci retracement and the 50-day Simple Moving Average) could discourage buyers, potentially leading to support levels at 1.0400-1.0390 (the 50% Fibonacci retracement and the 200-period Simple Moving Average) and 1.0350 (the 38.2% Fibonacci retracement)
EUR/USD Euro US Dollar PMI Relative Strength Index Technical Analysis Trade Deficit Tariffs ECB
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