EUR/USD on the Brink of Further Declines with Key Events Ahead

EUR/USD 

Prediction: Decrease 

EUR/USD is currently trading around $1.0411, with bearish momentum after testing the strong  resistance zone at $1.0460. The primary trend may continue downward, but it depends on key  fundamentals in the upcoming week, including interest rate decisions from the ECB and the  Fed.

FUNDAMENTAL ANALYSIS 

U.S. Tariff Policy: President Trump's proposed tariffs of 10-25% are expected to create market  volatility. While the current proposal is seen as "moderate," a more assertive stance could cause  significant USD fluctuations.  ECB Policy

Outlook: The ECB is anticipated to cut rates by 0.25% next week, signaling  monetary easing that could weaken the Euro. If post-meeting statements emphasize further  easing, this may amplify the Euro's weakness.  Fed's Rate

Decision: The Fed is also set to announce its rate decision next week. While no  major changes are expected, a hawkish tone could strengthen the USD further, pressuring 

EUR/USD.  USD Stability: The USD Index (DXY) remains stable around 108.25. Since the Euro accounts  for 57.6% of the DXY weight, any EUR/USD weakness could further bolster the index. 

Market Sentiment: Investors are cautious ahead of critical decisions by both the ECB and theMFed. Any unexpected news could shift market direction abruptly. 

TECHNICAL ANALYSIS 

Key Resistance: 

$1.0460: Recent swing high and the 61.8% Fibonacci retracement from December’s decline. A  breakout above this level could target $1.0500. 

Key Support: 

$1.0403: Fibonacci 50% level and dynamic EMA 200 support on the H4 chart. A break below  this level could push EUR/USD toward stronger supports at $1.0375 and $1.0289. 

RSI: On the H4 chart, RSI is neutral at 55-60, indicating weakening upward momentum. A drop  below 50 would signal a potential reversal. 

Trend and Trading Strategy 

● In the short term, EUR/USD is trading within a downtrend channel, with crucial support at  $1.0403. 

● If this support breaks, the downtrend is likely to continue. However, if the pair holds  above $1.0403, a corrective bounce toward resistance at $1.0460 is possible. 

EUR/USD is poised for further declines if it breaks below $1.0403, but caution is advised due to  upcoming ECB and Fed announcements. Stay vigilant for market-moving news. 

 

 

 

 

 

 

 

 

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