EUR/USD Market Analysis: Euro vs US Dollar Outlook and Forecast

Jasper Osita - Market Analyst

2026-01-07 13:52:32

EUR/USD trades under pressure as U.S. dollar strength offsets euro recovery attempts.
Weak Eurozone data and policy divergence keep the pair capped despite short-term rebounds.
EUR/USD remains vulnerable below key resistance, with downside risk toward major support if 1.1650 fails.

EUR/USD Fundamental Market Narrative

EUR/USD has entered the new trading year struggling to extend its prior upside momentum, as renewed U.S. dollar strength and soft Eurozone macro data reinforce a cautious outlook for the euro. While the pair attempted to stabilize above mid-range levels, fundamental divergence between the Federal Reserve and the European Central Bank continues to shape price action.

Recent Eurozone data releases have highlighted ongoing economic fragility. Inflation prints across major economies have moderated further, while PMI data point to slowing services activity and subdued demand. These developments strengthen expectations that the ECB will maintain a dovish stance for longer, limiting yield support for the euro.

In contrast, the U.S. dollar has regained traction after a weak finish last year. Although markets still anticipate eventual Federal Reserve easing, U.S. economic indicators remain relatively resilient, particularly in labor markets and consumption trends. This resilience reduces urgency for aggressive rate cuts, supporting the dollar and pressuring EUR/USD.

Risk sentiment also plays a role. Periodic shifts toward risk-off positioning continue to favor the U.S. dollar as a defensive currency, preventing sustained EUR/USD upside despite temporary pullbacks in USD strength.

Red Folder Events

Key upcoming and recent high-impact events influencing EUR/USD include:

U.S. ISM PMI & Non-Farm Payrolls: Strong readings reinforce dollar demand and downside pressure on EUR/USD.
Eurozone CPI & PMI Releases: Softer-than-expected data increases expectations of prolonged ECB accommodation.
ECB and Federal Reserve Policy Commentary: Any shift in forward guidance remains a major volatility catalyst for the pair.

These red-folder events continue to dictate short-term volatility and directional conviction.

EUR/USD Technical Outlook

EUR/USD remains technically fragile despite recent consolidation. Price action suggests a corrective structure rather than a renewed bullish trend.

Technical Price Action Narrative

The pair continues to trade below key resistance near the 1.1740–1.1750 zone.
Momentum indicators reflect waning bullish strength, with lower highs forming on intraday and daily timeframes.
Support remains layered near 1.1690 and more critically at 1.1650.

Bullish Scenario: Reclaim and Hold Above Resistance

A bullish continuation scenario requires clear structural confirmation:

A sustained break and daily close above 1.1750
Improving Eurozone macro data or hawkish ECB repricing
Broad-based U.S. dollar weakness driven by dovish Fed expectations

Upside Targets:

1.1800
1.1850

Without these conditions, upside attempts remain corrective in nature.

Bearish Scenario: Breakdown Through Key Support

Downside risk remains dominant if current supports fail:

A decisive break below 1.1650 opens downside continuation
Strong U.S. labor or inflation data strengthens USD demand
Risk-off flows favor dollar positioning

Downside Targets:

1.1600
1.1550–1.1500 liquidity zone

Outlook Summary

EUR/USD remains driven by macro divergence rather than technical strength. As long as the U.S. economy shows relative resilience and the ECB maintains a cautious stance, rallies are likely to face selling pressure at premium levels. Traders should remain selective, focusing on high-impact data catalysts and confirmation around key technical zones.

Start Trading Live!

Trade forex, indices, gold, and more
Access ACY, MT4, MT5, & Copy Trading Platforms

It’s time to go from theory to execution!

Create an Account. Start Your Live Trading Now!

Check Out My Contents:

Beginners Path

Strategies That You Can Use

Looking for step-by-step approaches you can plug straight into the charts? Start here:

Indicators / Tools for Trading

Sharpen your edge with proven tools and frameworks:

How To Trade News

News moves markets fast. Learn how to keep pace with SMC-based playbooks:

Learn How to Trade US Indices

From NASDAQ opens to DAX trends, here’s how to approach indices like a pro:

How to Start Trading Gold

Gold remains one of the most traded assets - here’s how to approach it with confidence:

How to Trade Japanese Candlesticks

Candlesticks are the building blocks of price action. Master the most powerful ones:

How to Start Day Trading

Ready to go intraday? Here’s how to build consistency step by step:

Swing Trading 101

Learn how to navigate yourself in times of turmoil

Markets swing between calm and chaos. Learn to read risk-on vs risk-off like a pro:

Want to learn how to trade like the Smart Money?

Step inside the playbook of institutional traders with SMC concepts explained:

Master the World’s Most Popular Forex Pairs

Forex pairs aren’t created equal - some are stable, some are volatile, others tied to commodities or sessions.

Metals Trading

Stop Hunting 101

If you’ve ever been stopped out right before the market reverses - this is why:

Trading Psychology

Mindset is the deciding factor between growth and blowups. Explore these essentials:

Market Drivers

Risk Management

The real edge in trading isn’t strategy - it’s how you protect your capital:

Suggested Learning Path

If you’re not sure where to start, follow this roadmap:

Start with Trading Psychology → Build the mindset first.
Move into Risk Management → Learn how to protect capital.
Explore Strategies & Tools → Candlesticks, Fibonacci, MAs, Indicators.
Apply to Assets → Gold, Indices, Forex sessions.
Advance to Smart Money Concepts (SMC) → Learn how institutions trade.
Specialize → Stop Hunts, News Trading, Turmoil Navigation.

This way, you’ll grow from foundation → application → mastery, instead of jumping around randomly.

Follow me for more daily market insights!

Jasper Osita - LinkedIn - FXStreet - YouTube

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

Tác giả

Jasper has been in the markets since 2019 trading currencies, indices and commodities like Gold. His approach in the market is heavily accompanied by technical analysis and of course, supported by fundamentals. He has a background in trading proprietary firms and has been teaching students how to navigate themselves in the markets from basic to advance concepts.

Giá chỉ mang tính chất chỉ dẫn

Nước Úc1300 729 171

Quốc tế+61 2 9188 2999

Thư điện tửsupport@acy.com

Huyền thoại bóng đá & Đại sứ Toàn cầu ACY Securities

Tốc độ xử lý lệnh trong vòng 30ms* – Tốc độ xử lý lệnh 30 mili-giây được đề cập trên trang web này là khoảng thời gian từ máy chủ giao dịch của ACY Securities đến các nhà cung cấp thanh khoản của chúng tôi.

CẢNH BÁO RỦI RO: Giao dịch ngoại hối và phái sinh mang rủi ro đáng kể và không phù hợp với tất cả các nhà đầu tư. Bạn không sở hữu hoặc có bất kỳ lợi ích nào đối với các tài sản cơ bản. Trước khi bạn quyết định giao dịch ngoại hối và phái sinh, chúng tôi khuyến khích bạn xem xét mục tiêu đầu tư, khả năng chịu rủi ro và kinh nghiệm giao dịch của bạn. ACY Capital LLC (Số công ty: 2610 LLC 2022) cung cấp lời khuyên chung không xem xét mục tiêu, tình hình tài chính hoặc nhu cầu của bạn. Nội dung của trang web này không được hiểu là lời khuyên cá nhân; vui lòng tìm kiếm lời khuyên từ một cố vấn tài chính hoặc thuế độc lập nếu bạn có bất kỳ câu hỏi nào. KIS và Điều khoản có sẵn theo yêu cầu hoặc đăng ký. Nếu có bất kỳ lời khuyên nào trên trang web này, đó chỉ là lời khuyên chung.

ACY Capital LLC ('ACY LLC') được thành lập tại St Vincent và Grenadines (Số công ty: 2610 LLC 2022). Địa chỉ đăng ký: Suite 305, Trung tâm doanh nghiệp Griffith, Beachmont, Kingstown.

ACY Securities SA Pty Ltd (Đăng ký: 2009/008731/07) được quản lý bởi Cơ quan Quản lý Ngành Tài chính (FSCA: 51008). Địa chỉ đăng ký: 4 Stan Road, Sandton, Johannesburg, Gauteng, 2196. FSCA đã cấp phép cho chúng tôi cung cấp dịch vụ tài chính theo Điều 8 của Dịch vụ Tư vấn Tài chính và Dịch vụ Trung gian.

Đối với khách hàng Jordan, Công ty Chứng khoán và Đầu tư Al Bilad (Số đăng ký: 397, Số tổ chức: 200027569), có trụ sở tại Tòa nhà số 11, Đường Paris, Al Swifeyeh, Amman, Jordan (Al Bilad), đóng vai trò là nhà môi giới giới thiệu cho ACY Capital Australia LLC (Số công ty: 2610 LLC 2022). Al Bilad được Ủy ban Chứng khoán Jordan cấp phép cung cấp các dịch vụ tài chính bằng cách giới thiệu khách hàng Jordan đến các nhà môi giới nước ngoài, trong khi ACY LLC vẫn là đơn vị chính và nhà phát hành các sản phẩm của mình.