Daily Technical Analysis EUR/USD: Rises at a Slow Pace as Trade News Takes Center Stage

The EUR/USD pair moved within a narrow range on Tuesday, oscillating near the 1.0400 level as the Fiber struggled to establish a clear direction. Both European and U.S. economic data remain sparse this week, with investor sentiment heavily influenced by the unpredictable rhetoric surrounding trade policy from newly inaugurated U.S. President Donald Trump.

Throughout the week, President Trump has wavered on campaign promises to impose flat tariffs on all U.S. trading partners on his first day in office. Instead, he has threatened new tariffs on Canada, Mexico, and China, ranging from 10% to 25%, potentially starting as early as February 1. His dissatisfaction with perceived trade inequities has also placed Europe in his crosshairs for retaliatory tariffs, causing the euro to hover near familiar technical support levels.

The euro’s weakening interest rate differential against the U.S. dollar has exacerbated its technical vulnerabilities. A consistent stream of mixed signals from European Central Bank (ECB) officials has further diminished investor interest in new policy developments. ECB President Christine Lagarde is scheduled to speak on Wednesday, but little new information is expected.

Looking ahead, the release of Purchasing Managers’ Indices (PMI) data for both the EU and the U.S. on Friday is anticipated. Market expectations suggest mixed results for both regions, which could add to the pair’s current lack of momentum.

EUR/USD Daily Technical Analysis for January 22nd:

EUR/USD remains trapped in a short-term consolidation range, with a technical floor around 1.0350 and bullish momentum constrained by the 50-day exponential moving average (EMA) near 1.0450.

The pair continues to trade below the 200-day EMA at 1.0700, reflecting a broader downtrend. While there are signs of a potential technical recovery, the pair has yet to gather sufficient momentum to break out of its bearish trajectory.