EUR/USD Price Forecast - Eur Slips to 1.1650 as NFP and Tariff Risks Put 1.1589–1.1470 in Play

EUR/USD: Dollar Strength Pressures the Pair Near 1.1650 as 1.1589–1.1470 Come Into Focus

Macro backdrop for EUR/USD around 1.1650

EUR/USD is trading near 1.1650 after five consecutive daily declines, unwinding the late-December push toward the 1.1770–1.1808 zone and sliding back into the lower half of the 1.1589–1.1917 structure. The move lower coincides with a firming US Dollar and a market that is repositioning around US labor data and a slower but still resilient US economy, while Eurozone activity stabilizes at a low level without providing a strong fundamental bid for the EUR. The cross now trades under its key short-term averages, turning them into resistance and leaving the downside toward 1.1589 and then 1.1467–1.1470 exposed if US data keeps favoring the USD.

US Dollar leg of EUR/USD: NFP expectations, labor data and DXY structure

The dollar side of EUR/USD is supported by pre-NFP positioning and a labor market that is cooling gradually, not collapsing. Headline NFP expectations sit around 60,000 jobs for December, down from roughly 64,000 in November, but weekly data are not weak enough to force the Fed into an urgent dovish pivot. US Initial Jobless Claims rose to about 208,000 in the week to January 3, slightly above the prior revised 200,000 but still below consensus near 210,000, while continuing claims climbed to around 1.914 million from 1.858 million, pointing to a slow increase in people staying on benefits rather than an abrupt break in employment. The ADP report adds only 41,000 private-sector jobs and job openings fall toward 7.146 million, confirming a gradual cooling of demand for labor. Despite that, rate markets still price an overwhelming probability—around the mid-80% area—that the Fed keeps rates unchanged at the upcoming meeting, with cuts pushed further out instead of being front-loaded. That combination—labor slowing but not crashing, and a Fed that can stay cautious—allows the US Dollar Index (DXY) to grind higher. DXY trades just above 99.00, with short-term price action contained in a rising channel. Former resistance near 98.85 now acts as support, backed by the 200-period moving average around 98.50. RSI in the mid-to-high 60s shows strength without a blow-off top. As long as that channel holds, the USD side of EUR/USD retains a constructive bias, and rallies in the pair are likely to be sold rather than chased higher.

*Eurozone fundamentals: soft growth, slightly better sentiment and a steady ECB

The Euro leg of EUR/USD is held back by a recovery that is stabilizing at a low level instead of re-accelerating. The European Commission’s Business Climate Index improves from around -0.66 to -0.56, still negative but no longer deteriorating. Consumer Confidence moves from roughly -14.6 to -13.1, while the Economic Sentiment Indicator edges down from 97.1 to 96.7, staying below the 100 threshold that marks its long-run equilibrium. On the price side, the Eurozone PPI jumps 0.5% month-on-month in November after 0.1% previously and above estimates near 0.2%, but the annual rate remains -1.7%, a fourth straight month of contraction, confirming that pipeline inflation pressures are largely defused even if the latest monthly print is a bit firmer. The unemployment rate slips from 6.4% to 6.3%, historically low for the bloc and consistent with a labor market that is not under severe stress. Against that backdrop, ECB Vice-President Luis de Guindos describes current rates as “appropriate” and notes that inflation is around target but uncertainty is high. The ECB’s consumer survey shows inflation expectations at roughly 2.8% (1-year), 2.5% (3-year) and 2.2% (5-year), effectively anchored just above the 2% objective. That keeps the ECB comfortable with a 2.00% policy rate and in no rush to loosen, but the data are not strong enough to justify hawkish surprises. For EUR, this means a floor—because the ECB is not racing to cut—but not a catalyst for sustained appreciation against a dollar supported by relatively stronger growth and safe-haven demand.

Short-term technical picture for EUR/USD: 1.1650 holding, 1.1589 and 1.1467 acting as magnets

On the daily chart, EUR/USD sits clearly in a corrective downswing. Spot trades around 1.1650, below the 9-day EMA and 50-day EMA, which cluster near 1.1680 and 1.1696. That cluster has flipped from support to resistance, confirming that the bulls lost control of the short-term trend. The 14-day RSI at roughly 39 indicates fading momentum without reaching deeply oversold territory. Importantly, the pair has broken under the 55-day EMA near 1.1671, a level that previously supported the rebound from 1.1467. The break signals that the recovery from 1.1467 toward the 1.1917 high has likely completed and that the market is now traveling through the third leg of a broader corrective pattern. Immediate support sits at the six-week low near 1.1589. A daily close below that level opens the way toward the 1.1467–1.1470 region, which marks both the earlier reaction low and the zone repeatedly highlighted by different models as a logical downside objective for this leg. On the topside, the first meaningful resistance is the 1.1680–1.1696 EMA band. A sustained close above that area would be needed to argue that the corrective wave is stalling, with the next upside focus at the 1.1808 high from December 24 and then 1.1917, the highest level since mid-2021. As long as spot trades beneath the EMA cluster and cannot reclaim 1.1700, bears keep the tactical advantage.

Bigger-picture structure for EUR/USD: correction within an unfinished uptrend as long as 1.1408 holds

From a higher-timeframe perspective, EUR/USD is still digesting the powerful advance from the 0.9534 low in 2022 up to the 1.1917 top. As long as the pair stays above the 55-week EMA around 1.1408, the long-term structure still favors the continuation of this uptrend, with any slide toward 1.14–1.15 treated as a deep but still corrective retracement rather than a complete trend reversal. A decisive and sustained break above the 1.2000 psychological barrier would confirm that the entire move from 0.9534 is transitioning into a new bullish extension, opening the door to a much higher trading range for EUR/USD over the coming quarters. On the other hand, a period of sustained trading below the 55-week EMA would indicate that the rise from 0.9534 was only a three-wave corrective bounce. That scenario would shift the long-term bias back to bearish and put the 1.1400–1.1000 zone into play as a medium-term target band instead of a buy-the-dip area. For now, price action still respects the weekly support, so the most coherent read is: long-term uptrend intact, medium-term correction in progress, short-term momentum clearly negative for EUR/USD.