- The bulls again failed to lift the EUR/USD price in the last trade of 2024, as they tried to bounce towards the resistance level of 1.0458.
- Excluding the strength factor, the EUR/USD price returned to its broader downward path, settling around the 1.0372 support level, near a two-year low.
- Moreover, the euro’s recent rally came with a temporary boost following the release of stronger-than-expected Spanish inflation data. But why Spain?
According to economists, the inflation process is taking place faster in Spain than in other Eurozone countries. Therefore, these data will confirm the assessment of a member of the Governing Council of the European Central Bank who confirmed that the next interest rate cut by the ECB could take longer after the recent rise in inflation.
Eurodollar losses may continue into 2025
Forecasts by forex market analysts indicate that the performance of the EUR/USD pair during January 2025 will continue the current downward trend. Experts believe that January is historically negative for the performance of the euro against the US dollar. In addition, the US dollar is finding strength factors at the same time, which ensures stronger breakouts of the euro to the downside in the coming days.
Trading Tips:
Recent performance confirms the strength of our technical view on the euro that it will remain under downward pressure and any attempt to recover upwards may be temporary
US stock markets may close due to an extraordinary event
The US stock market has officially announced that it will close on January 9, 2025, in observance of the National Day of Mourning for former US President Jimmy Carter. In this regard, companies listed on the market announced that the New York Stock Exchange and the US Nasdaq and CBOE Global Markets will be closed. For its part, CME Group, the operator of the stock market and interest rates in the United States, has not yet commented on its plans. Meanwhile, the US bond market will close at 2 p.m. New York time, as recommended by the Securities Industry and Financial Markets Association. In general, shutdowns are part of a long-standing American tradition in which financial institutions cease operations after the death of a US president.
EUR/USD analysis today:
The broader trend of the EUR/USD pair remains bearish. It is clear that the chances of EUR/USD moving towards parity are high if the factors of euro weakness persist. Meanwhile, the price of the US dollar continues to be supported by the Trump trade and demand for it as a safe haven. Technically, gains in the EUR/USD pair lifted the exchange rate above its nine-day exponential moving average (EMA), representing the first truly positive technical development in some time. If the EUR/USD pair closes above this indicator – which is currently at 1.0432 – further gains could take it into the first week of January 2025. However, it will not be until next Friday that the first real test of important economic data for 2025 .comes in the form of the first US non-farm payrolls report for the year.
Broader expectations are that the report will show continued strength in the US labor market, justifying the Federal Reserve’s decision to pause interest rate hikes in the US. However, the biggest surprise would be a weaker-than-expected US jobs number, which could send the US dollar lower. Moreover, given all the research evidence we see, this is unlikely, and the US dollar’s superiority could widen.
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