EUR/USD Price Forecast - Eur Stuck Below 1.16 As Tariff Shock And Crowded Euro Longs Point Back To 1.15

EUR/USD Slides Under Tariff Fire As Crowded Longs Meet Bearish Tech

EUR/USD Price Map: Bearish Bias Below 1.1695 Despite 1.16 Rebound

EUR/USD is trading in a corrective bounce, not in a trend reversal. The pair has recovered from the 1.1575–1.1600 support region and is trying to stabilize near 1.16–1.1640, but the broader structure stays bearish as long as price is capped below 1.1640, 1.1655 and, crucially, 1.1695–1.1740.
Short-term downside levels are clearly defined. Immediate support sits at 1.1584 (recent low), then the psychological 1.1500 line, followed by the stronger band around 1.1470–1.1400 highlighted as key for bears. On the topside, resistance is stacked at 1.1640, 1.1650, 1.1655, 1.1680, 1.1695 and then 1.1740–1.1800. Every rally into this cluster has to be treated as suspect while the macro and positioning backdrop works against the euro.
The market is effectively trading a range inside a downtrend: short-term traders are trying to exploit the 1.1575–1.1600 floor for rebounds, while medium-term players are watching for fresh selling opportunities between 1.1640 and 1.1700 as long as EUR/USD fails to close convincingly above 1.1695–1.1740.

Technical Structure On EUR/USD: Bear Channel, Fib Ceiling And Moving Averages

On the technical side, EUR/USD remains locked inside a bearish corrective channel on the short-term charts. Price is trading below a downward-sloping trendline and below the 50-day EMA and the 100- and 200-day simple moving averages, which still show the classic bearish configuration: the 100-day SMA below the 200-day SMA, and spot below both. That alignment signals that the dominant trend is still down, even if intraday charts show temporary rebounds.
The recent move higher is essentially a test of layered Fibonacci resistance. After the slide from the 1.1800 area toward 1.1584–1.1600, the main retracement levels sit around 1.1640–1.1655. The 38.2%, 50% and 61.8% retracements are clustered in that narrow band (~1.1640–1.1655), which overlaps with the descending trendline and nearby horizontal resistance. That zone is a textbook technical ceiling where sellers can re-enter with tight risk.
Momentum indicators are in “correction, not breakout” mode. The Stochastic has turned up from oversold territory, and the RSI is climbing from depressed levels toward the mid-range. Both signals justify a relief bounce from 1.1584–1.1600, but neither confirms a trend change while price is pinned under the moving averages and the Fib confluence.
If any of the Fibonacci layers around 1.1640–1.1655 hold, the base case remains a fresh downswing back toward 1.1550–1.1500 and potentially 1.1470–1.1400. Only a decisive break above the trendline and a daily close above the 61.8% retracement near 1.1655, followed by 1.1695–1.1740, would argue that bears are losing control.

Trading Levels And Strategy Clashes Around EUR/USD

The tactical setups derived from the levels show how divided the market is. One camp is looking to buy EUR/USD near strong support, the other is preparing to fade strength into resistance.
On the long side, there is a clear plan: buying around 1.1530–1.1550 with a target at 1.1800 and a stop-loss near 1.1470. That structure assumes the 1.1500 handle holds as a psychological and technical floor and that the broader dollar story eventually weakens enough to let EUR/USD retest the upper part of the recent range.
On the short side, the focus is on the resistance band: selling into 1.1700 with a target at 1.1500 and stop-loss at 1.1780. That trade aligns with the prevailing downtrend, the bearish moving average configuration and the resistance stack between 1.1680 and 1.1740–1.1800.
Both playbooks are internally consistent, but they sit on different time horizons. The buy-the-dip crowd is trying to play a corrective squeeze from around 1.1530–1.1600 up toward 1.1740–1.1800, while trend followers are waiting for EUR/USD to exhaust its bounce somewhere in the 1.1640–1.1700 range. Given the underlying macro and positioning signals, the second camp has the structural wind at its back.

German Growth, Inflation And The Euro’s Fundamental Weak Spot

The euro side of EUR/USD is not offering a robust growth story. Germany’s economy – the core of the Eurozone – only managed about 0.2% growth in 2025, exactly in line with expectations but barely above stall speed. More importantly, the prior year’s performance was revised lower: the 2024 GDP estimate was cut from -0.2% to -0.5%, underlining how shallow and fragile the recovery really is.
Inflation in Germany is also cooling more rapidly than previously thought. Final CPI data is expected to show annual inflation sliding from 2.3% to 1.8% in December. That drop looks good at first glance, but it raises uncomfortable questions about domestic demand and whether the Eurozone’s largest economy is drifting toward a low-growth, low-inflation trap.
For EUR/USD, this combination of 0.2% GDP growth, a -0.5% revision for the prior year and 1.8% inflation signals limited support for a sustained euro bull phase. It keeps pressure on the European Central Bank to stay cautious and reinforces the narrative that any aggressive tightening cycle is off the table. In a world where rate differentials and growth spreads matter, that leaves EUR structurally disadvantaged versus USD on medium-term horizons.

Tariffs, Greenland And Political Risk Bearing Down On EUR/USD

The political backdrop is a direct headwind for the euro. The U.S. administration has announced 10% tariffs on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the UK starting 1 February, with a clear threat to ramp those duties to 25% from June if no agreement is struck over the Greenland issue.
Europe is weighing a response worth around €93 billion in counter-tariffs and broader trade measures. That scale of retaliation would harden the divide across the Atlantic and hit exactly the export-driven sectors that underpin much of the Eurozone’s growth – autos, machinery, chemicals and premium consumer goods.
For EUR/USD, this conflict is doubly negative for EUR. First, it darkens the outlook for European growth, which is already weak and tied heavily to external demand. Second, it forces investors into “risk-off” mode, typically favouring USD and U.S. Treasuries over European assets.
The euro is also being dragged by the narrative that Europe is reacting rather than dictating the agenda. Persistent uncertainty around tariffs, sovereignty debates and fragmented responses inside the EU all feed into a risk premium on EUR, which shows up in the inability of EUR/USD to hold gains above the mid-1.16s despite repeated intraday bounces.

Risk Aversion, Safe Havens And The Dollar’s Mixed Role Against EUR

Global sentiment has clearly shifted into risk-averse territory. Equities have come under pressure, gold has surged above $4,660–$4,680 per ounce, and volatility in rates and FX has firmed as traders try to price a more disorderly trade environment.
Normally, this pattern is straightforward for EUR/USD: lower risk appetite tends to hurt high-beta currencies and support USD as the world’s primary reserve asset. This time, the picture is more nuanced because the tariff shock is aimed directly at Europe, and markets are also questioning the longer-term impact on the U.S. economy.
The US Dollar Index (DXY) recently hovered around 99.14–99.20, dropping after the tariff headlines as investors reassessed the damage to U.S. trade and growth. Support is clustered near 99.00–99.05, close to the rising 50-period EMA on the shorter-term charts, while resistance is layered at 99.46, 99.67 and 99.85–100.00. That structure shows a dollar that is consolidating rather than collapsing, with scope to extend higher if risk aversion persists and the support band holds.
For EUR/USD, this means the pair is caught between two forces. On one side, EUR is undermined by weak growth, Germany’s soft data, and direct tariff exposure. On the other side, USD faces its own macro uncertainty but still benefits from safe-haven flows and relatively better policy flexibility. The end result is a pair that struggles to trend higher and frequently sells off from resistance zones like 1.1640–1.1700, even when the immediate newsflow looks broadly negative for the dollar.

Fed Expectations, Labor Data And The USD Side Of The Spread

The U.S. policy backdrop is another pillar supporting USD against EUR. Strong labor market data released recently has pushed back expectations of further Federal Reserve rate cuts. Markets now assign roughly a 95% probability that rates remain unchanged at the January 27–28, 2026 FOMC meeting.
By delaying the timing of the next cut, robust employment figures help keep U.S. yields relatively higher than those in the Eurozone, where growth is soft and inflation is retreating toward 1.8%. As rate differentials remain in favour of the dollar, medium-term investors find it easier to hold USD-denominated assets than to chase rallies in EUR/USD.
For the pair, this means that every attempt to push above 1.1640, 1.1655 and 1.1695 runs into the same structural wall: the Fed has room to stay patient, while the ECB has far less space to tighten meaningfully. That spread dynamic, combined with the tariff shock and geopolitical risk, explains why rebounds from 1.1575–1.1600 look corrective rather than impulsive.

Futures And COT Positioning: Crowded EUR Longs Versus Nervous Specs

Positioning data from the futures market adds a critical layer to the EUR/USD story. Asset managers have pushed gross EUR longs to an all-time high, with net-long exposure at a 2.5-year high. Real-money accounts are structurally positioned for a stronger euro, effectively betting that the worst of the dollar strength is behind us and that EUR/USD should trade higher over time.
Speculative traders tell a different story. Large speculators have cut their net-long euro exposure at the fastest weekly pace since late 2024, reducing net longs by around 30.2k contracts. Gross longs have been slashed by approximately 14.6k contracts, while gross shorts have increased by about 15.5k, signalling a clear pivot away from aggressive bullish EUR positioning.
This divergence between long-term asset managers and more tactical speculators is important. When EUR longs are crowded at the institutional level while short-term traders are backing away, any downside shock in EUR/USD can accelerate as weak hands capitulate and stop-loss orders trigger. It increases the risk of sharp, air-pocket moves lower from resistance bands like 1.1640–1.1700 down toward 1.1535–1.1500 and potentially 1.1470–1.1400.
In other words, positioning is asymmetric: upside beyond 1.1740–1.1800 requires fresh buying on top of already extended longs, while downside only needs a modest loss of confidence to force de-risking from crowded EUR bulls.

Short-Term Rebound Signals On EUR/USD: Why The Bounce Still Looks Vulnerable

Short-term intraday action shows why EUR/USD has been able to push away from the 1.1575–1.1600 floor despite the heavy macro backdrop. The pair recently staged a sudden rebound, turning early session losses into gains, even while remaining inside its bearish corrective channel.
Momentum indicators justify this bounce. The Stochastic oscillator has lifted out of oversold territory, and the RSI is gaining from depressed levels, pointing to a natural corrective move higher as sellers take profit near key supports.
However, despite this rise, EUR/USD is still trading below the 50-day EMA, and the broader channel structure and moving averages continue to apply downward pressure. The recent upswing has already pushed short-term indicators toward overbought zones relative to price, which often precedes a fading of bullish momentum inside a downtrend.
The message from this mix is straightforward: the bounce from 1.1584–1.1600 is not irrelevant – it can extend toward 1.1640–1.1655 and even 1.1695 – but as long as EUR/USD remains under the trendline and the clustered moving averages, it should be treated as a counter-trend rally rather than the start of a new bull leg.

US Dollar Index, Cross-Market Flows And What They Signal For EUR/USD

The US Dollar Index (DXY) remains a critical barometer for EUR/USD, given the euro’s heavy weight in the basket. With DXY holding near 99.14–99.20 and consolidating above 99.00–99.05, the dollar is not signalling a structural breakdown. The support band aligns with a prior resistance zone and with the rising 50-period EMA, reinforcing the idea that pullbacks in the dollar are currently corrective.
Resistance is layered at 99.46, 99.67 and 99.85–100.00, coinciding with the upper boundary of an ascending channel. A break above 99.46 would likely open the door for a test of 99.80–100.00, which would be a clear negative for EUR/USD and make it difficult for the pair to sustain any move beyond 1.1695–1.1740.
Cross-asset signals – equities under pressure, gold at record highs, and European risk assets underperforming – are consistent with a dollar that can remain firm or strengthen intermittently as investors seek liquidity and safety. Until DXY loses 99.00–98.85 decisively, EUR/USD rallies are fighting both the technical picture and the macro flow.

EUR/USD Verdict: Bearish Bias, Sell Rallies Toward 1.1640–1.1700

Putting everything together – Germany’s 0.2% growth and -0.5% revision, inflation sliding to 1.8%, tariff threats of 10% rising to 25%, potential €93 billion in EU retaliation, DXY holding around 99.00–99.20, asset managers sitting on record EUR longs, speculators slashing net exposure by 30.2k contracts, and EUR/USD stuck below 1.1640–1.1695 with a bearish channel and moving averages stacked above price – the balance of evidence does not favour a sustained euro recovery.
The pair has room for tactical rebounds from 1.1575–1.1600, and dip-buyers around 1.1530–1.1550 can extract short-term upside if 1.1500 holds. But structurally, the more compelling trade is to sell strength into the resistance band.
From a directional standpoint, EUR/USD looks like a Sell-biased pair on rallies, with the 1.1640–1.1700 area offering an attractive zone to re-establish downside exposure. Targets sit initially near 1.1535–1.1500, with scope toward 1.1470–1.1400 if the tariff conflict escalates and crowded EUR longs begin to unwind.
Bias: Bearish on EUR/USD – Sell rallies toward 1.1640–1.1700; medium-term Sell rather than Buy or Hold.

That's TradingNEWS