- EUR/USD price analysis remains range-bound despite eased US-EU tensions over Greenland.
- The Fed’s patience and the ECB’s growth concerns continue to weigh on the euro.
- Markets await US initial jobless claims, Core PCE, and GDP data for directional bias.
EUR/USD traded around 1.1685 on Thursday after bouncing 0.3% on Wednesday. However, the pair remains stuck in a ranging pattern. The dollar is clinging to support around 98.80 on the DXY, held up by easing geopolitical tensions and the Fed’s stubborn refusal to cut rates anytime soon.
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Meanwhile, Trump backing off his tariff threats to Europe was the significant catalyst this week. He’d threatened 10% tariffs on eight EU countries starting February 1, which had everyone spooked about a trade war. Later, he said the US and NATO hammered out a “framework for a deal” on Greenland and ruled out military action. That pulled the rug out from under the safe-haven dollar bid and the euro’s slight breather. However, the relief was temporary, as the dollar remains supported amid other perspectives.
The Fed is the real anchor, holding the greenback bid. Officials have reiterated that they’re not in a rush to cut rates unless inflation actually moves toward 2%. The markets are pricing in 50-bps cuts for the year, but around midyear or after. For now, the Fed’s hawkish stance is keeping the rate differential favorable for the dollar versus the euro, especially given the ECB’s likely further rate cuts.
Traders are basically sitting on their hands waiting for key US data. Initial jobless claims, GDP, and PCE inflation numbers are coming, which could shift the narrative. If the data comes in hot, the dollar could rally. However, if it’s soft, the Fed might have to cut sooner than expected.
The pair has been range-bound between 1.1665 and 1.1700 for now. The easing of trade tensions helped EUR/USD catch a bid, but the Fed’s higher-for-longer stance and cautious outlook mean the dollar is likely to stay supported. Without a major shift in Fed expectations or a return of geopolitical turmoil, the pair looks stuck in a near-term sideways trading range.
EUR/USD Technical Price Analysis: Ranging Near Key MAs
The EUR/USD 4-hour chart shows a consolidation under 1.1700, supported by a confluence of 20- and 100-period MAs near 1.1685. The MAs reveal a mixed scenario with a 200-period MA at 1.1700 capping gains, while the downside could find support at the 50-period MA near 1.1660. The RSI remains flat above 50.0, indicating no clear momentum.
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In case of a bullish breakout above the 200-period MA, the price could soar to Wednesday’s highs near 1.1740 ahead of the weekly top near 1.1765. On the flip side, breaking the 1.1660 support could open the path to 1.1600 and 1.1550.
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