The EUR/USD currency pair is trading in negative territory, hovering just below the 1.0300 level on Thursday. This decline aligns with a broader risk-averse sentiment in the market that continues to favor the US Dollar. The technical analysis indicates that the current bearish trend is likely to persist in the near term.
As the EURO struggles to gain traction, it finds itself vulnerable following another day of losses. The combination of ongoing market uncertainty and bearish technical indicators creates challenges for any potential rebounds. The US Dollar’s strength is largely attributed to its appeal as a safe-haven asset amid rising concerns surrounding economic policies, particularly related to aggressive tariff implementations by the incoming administration.
On the domestic front, US stock markets are closed, with bond markets also shutting down early in tribute to the late former President Jimmy Carter. Later in the day, several policymakers from the Federal Reserve are set to speak. Their comments will be closely watched, especially if there is a reiteration of the need to proceed cautiously with policy changes, given the ambiguous economic impact of tariff discussions. Additionally, the jobs report to be released by the US Bureau of Labor Statistics is set to include vital labor market indicators, including Nonfarm Payrolls and the Unemployment Rate.
Meanwhile, the British Pound is under significant pressure as the selloff in UK gilts persists. The EUR/GBP exchange rate has experienced an uptick of more than 0.5% today, building on a previous increase, which suggests that some capital is flowing out of the Pound and into the EURO . If this trend continues, it could help limit further declines for the EUR/USD pair.
From a technical perspective, the Relative Strength Index (RSI) indicates a bearish momentum as it dips below the 40 level. Key support levels for EUR/USD are found at 1.0240 and 1.0200, while resistance may arise at 1.0320, 1.0350, and 1.0375 if stabilizing trends develop.
