EUR Currency News and Market Analysis

The EUR currency has been on a wild ride lately, with fluctuations in value that can catch even the most seasoned investors off guard. One key factor to consider is the European Central Bank's (ECB) monetary policy, which has had a significant impact on the EUR's value.

The ECB's decision to keep interest rates low has made the EUR less attractive to investors, causing its value to drop. This is because low interest rates make it less likely that investors will choose to hold onto the currency.

However, the EUR has also been affected by the economic performance of the eurozone, with countries like Germany and France showing signs of growth. This has helped to boost the EUR's value, making it a more attractive option for investors.

The EUR's value is also influenced by global events, such as the trade tensions between the US and China, which can cause investors to seek safer havens in the form of the EUR.

The US Dollar has been a bit of a rollercoaster lately, but it seems to have stalled in its rally. EUR/USD is trading in positive territory around 1.0300 on Friday.

The US ISM PMI data has been a key factor in this, improving to 49.3 in December and beating expectations. This is a welcome sign for the US economy.

The Relative Strength Index (RSI) indicator on the 4-hour chart has recovered slightly above 30, but it's still suggesting a bearish bias. This means that the market is still cautious.

1.0300 is a key level for EUR/USD, acting as both resistance and a static level. It's also a round level, making it a psychological barrier.

Looking ahead, 1.0350 is the next level of resistance, and it's also the 20-period Simple Moving Average (SMA). Beyond that, 1.0390-1.0400 is the next target.

If EUR/USD were to fall, the first level of support would be at 1.0240, followed by 1.0200 and 1.0160.

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The EUR/USD market has been quite volatile lately. The euro-dollar exchange rate is currently undervalued and oversold, according to Valentin Marinov, Head of G10 FX Strategy at Crédit Agricole.

The euro has been making a short-term recovery against the U.S. dollar, with hopes that the European Union's strategy to deal with Donald Trump will work. This recovery is also linked to President Donald Trump's indication that there is room to negotiate on tariffs.

In the past, the euro-dollar exchange rate has hit a one-month best during times of tariff breathing space. It's worth noting that the euro is rising against the dollar as President Trump indicates there is room to negotiate on tariffs.

Central bank decisions in both Europe and the U.S. will be a key risk highlight in the coming week. The euro is engaged in a short-term recovery against the dollar and further gains are possible.

Here are some notable EUR/USD market events in recent times:

The EUR/USD pair took a hit on its first trading day of 2025, plummeting to its weakest level in over two years at 1.0224.

This decline was largely due to the broad-based US Dollar (USD) strength, which was fueled by the US Department of Labor's release of lower-than-expected Initial Jobless Claims.

The data showed that claims dropped to 211,000 in the week ending December 28, beating the market expectation of 222,000.

This reading helped the USD gather strength, putting additional pressure on the EUR/USD pair.

The technical outlook suggests that the near-term bias remains bearish, with the pair struggling to hold its ground.

The ISM Manufacturing Purchasing Managers Index (PMI) data for December will be closely watched in the American session on Friday.

Investors are expecting the headline Manufacturing PMI to match November's reading of 48.4.

A bigger increase than expected in the inflation component, the Prices Paid Index, could support the USD and make it difficult for EUR/USD to hold its ground heading into the weekend.

On the other hand, a disappointing headline PMI could have the opposite effect on the pair's action.

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