EUR/USD Price Forecast: Euro Stuck Near 1.16 as Dollar Index Eyes 100

EUR/USD Pressured Around 1.16 As DXY Eyes 100 And 1.1590 Becomes The Pivot

Spot EUR/USD Price Zone And Recent Damage

EUR/USD trades roughly in the 1.1610–1.1620 band after printing a six-week low at 1.1593, ending a run that previously held the pair above 1.1700 and 1.1750. The pair sits clearly below its key short-term moving averages on intraday and daily charts, confirming that the last three weeks have been a controlled but persistent grind lower. At the same time, the US Dollar Index (DXY) holds in a rising channel around 99.28–99.50, with the market openly testing whether it can crack the 100.00 handle. That combination—EUR/USD pinned under broken support at 1.1610–1.1635 while DXY leans upward—is the core reality of this tape.

Macro Drivers: US Data Keeps USD In Pole Position

The macro side of the USD story justifies why the dollar bid has not backed off. Weekly Initial Jobless Claims fell to 198,000 for the week ending January 10, beating the 215,000 consensus and improving from a revised 207,000 the week before. That is not a labor market flashing recession; it’s a labor market absorbing restrictive policy without stress. Manufacturing is also flashing green: the New York Empire State Manufacturing Index jumped to 7.7 in January from -3.7 and the Philadelphia Fed Manufacturing Survey surged to 12.6 from -8.8, smashing a -2 expectation. When claims sit under 200k and both regional manufacturing indices swing from negative to clearly positive territory, the market has no incentive to price early, aggressive cuts from the Fed, and that automatically favors USD over EUR.

Policy Expectations: Fed On Hold While EUR Faces Earlier Easing

Rate expectations draw a clear line between the two currencies. Fed funds futures price roughly a 95% probability of no move at the late-January FOMC meeting, with the first realistic 25 bp cut pushed out toward June instead of the January/April scenarios that were discussed earlier. That means “higher for longer” is not a slogan; it is embedded in the pricing curve. On the European side, inflation and growth are both soft enough to justify earlier easing. German HICP—the anchor for the bloc—has dropped back to the ECB’s 2.0% y/y target for December, from 2.6% y/y in November, while monthly inflation printed 0.2% after -0.5%. With growth slow and inflation already at target, the ECB has room, and pressure, to cut before the Fed and likely by more. That divergence in timing and magnitude is precisely what keeps yield spreads skewed toward USD, and it is why every EUR/USD bounce is being sold rather than chased.

**Risk And Politics: Stable Fed Leadership And Trade Deals Back USD

Cross-currents from politics and risk sentiment are not bailing out EUR/USD either. On the U.S. side, confirmation that Jerome Powell remains Fed Chair removes a potential institutional overhang that markets had started to price. In parallel, a U.S.–Taiwan trade agreement focused on semiconductors and tariffs improves visibility on supply chains and supports risk appetite without undermining the dollar. The net effect is a backdrop where USD benefits from both solid domestic data and reduced policy uncertainty. In contrast, the Eurozone still faces weaker growth and a more hesitant political backdrop, so even when global risk stabilizes, the euro is not the primary beneficiary. The result is a landscape where DXY near 99.5 is coherent with fundamentals, and EUR/USD hovering near 1.16 reflects that reality rather than a temporary dislocation.

Intra-Day Currency Map: EUR Bounce Is More About A Pause In USD Than Genuine Strength

The daily performance grid underlines how limited today’s euro “strength” really is. On the session, EUR is only about 0.14% higher versus USD, but it is essentially flat or weaker against others: roughly -0.10% versus GBP, around -0.20% versus JPY, slightly negative versus AUD, and about -0.37% versus NZD. That means the lift from 1.1593 to 1.1620 in EUR/USD is mostly a function of the dollar taking a breather after a strong run, not a broad-based re-rating of the euro. When EUR cannot lead convincingly across the G10 table, any pop in EUR/USD has to be treated as corrective flow inside a downtrend, not the start of a sustainable bullish phase.

Higher-Timeframe Structure: EUR/USD Still Locked In A Downtrend Below 1.1680

Looking at the larger structure, EUR/USD remains in a clean downtrend. The pair has rolled over from a 10-week high above 1.17, broken back through the 1.1700 and 1.1750 zones, and is now trading beneath a descending trendline that caps every attempt to rally. On that frame, resistance zones at 1.16815 and 1.17443 are critical. As long as price remains below 1.16815, the entire setup is a sequence of lower highs and lower lows. Moving averages on this horizon slope downward, and the shorter-term gauge has already crossed below the longer-term one, confirming downside momentum rather than disputing it. Momentum tools like RSI are off extreme oversold conditions but remain sub-50, which matches the idea of a trend that is intact but not yet panicking.

Short-Term Technicals: Descending Triangle Around 1.1610 With 1.1593 As The Floor

On the 4-hour chart, the tactical picture is very precise. EUR/USD broke a demand band around 1.1610 and is now retesting that area from below. Price trades near 1.1610–1.1620, with the latest candle rejecting 1.1623, showing that sellers still defend that zone. The structure is a descending triangle: successive lower highs pressing down against horizontal support anchored at 1.1593. Both main intraday moving averages run above spot, reinforcing the bearish bias. RSI sits around 38–40, indicating weakness but not oversold exhaustion, so there is still room to extend lower without triggering an automatic mean-reversion bounce. This is the classic configuration where one clean break under the base often unleashes the next leg down.

Key Levels For EUR/USD: Resistance Ladders And Downside Targets

The level map around current price is tight, and it matters. Immediate resistance sits at 1.1620–1.1623, the intraday rejection area. Above that, 1.1635–1.1636 is a key band: it aligns with a 20-period moving average and a local Fibonacci marker, making it the first serious decision zone for short-term traders. If bulls somehow force a close over that band, the next caps stand at 1.1655, then around 1.1665 (channel top), and finally the more strategic 1.16815 level that separates a controlled downtrend from a deeper squeeze. On the downside, the first support is 1.1593, then 1.1590, effectively the same pivot. Just below, the channel bottom comes in near 1.1585. If that shelf breaks decisively, the market starts aiming at 1.1560 (late-November low), then 1.1555, and the broader support cluster around 1.15561–1.1524–1.15122. That cluster defines the next bigger target zone for any extension of the current move.

Dollar Index (DXY): Rising Channel Above 99 Keeps Pressure On EUR/USD

The DXY backdrop reinforces the bearish case for EUR/USD. The index trades around 99.28–99.50 inside a rising channel on the 4-hour chart. Price is supported by both short- and long-term moving averages, which are sloping higher and confirming bullish USD momentum. Key resistance levels sit near 99.745 and then 100.024, with supports at 99.000 and 98.714. Price is consolidating just under the upper trendline of the channel, signaling some hesitation but not a reversal. If DXY breaks through 99.745 and then 100.024 with solid volume, it will be extremely difficult for EUR/USD to defend 1.1590; flows will naturally push the pair toward 1.1550 and potentially into the 1.1520–1.1512 region. Only a sustained drop in DXY back below 99.000 would meaningfully reduce the downside pressure on the cross.

Event Risk: Industrial Production And Fed Speakers As Catalysts For The Next Leg In EUR/USD

The next catalysts that can unlock the range in EUR/USD are concentrated on the U.S. calendar. Industrial Production (MoM) is due with a consensus of 0.1% after 0.2% previously. A print meaningfully above 0.1% reinforces the narrative of a resilient U.S. economy, supporting yields and the USD, and raising the odds of a break under 1.1590. A soft surprise would go the other way, taking some pressure off the dollar and giving EUR/USD another shot at 1.1635–1.1665. Later, remarks from Fed officials Michelle Bowman and Philip Jefferson will be dissected for any shift in tone. If both continue to stress that inflation is still too high and policy must remain restrictive, rate-cut expectations drift further out, and the fundamental case for a stronger USD becomes even more entrenched. Any unexpectedly dovish hint, by contrast, would be the first real argument for a more durable bounce in EUR/USD above the immediate resistance band.

Trading Stance On EUR/USD: Clear Sell Bias With Focus On 1.1590 And 1.1550

After running through spot price, macro drivers, policy expectations, technical structure and the event calendar, the verdict is straightforward. EUR/USD around 1.1610–1.1620 is trading in a downtrend, below a descending trendline, with key resistance stacked at 1.1635–1.1665–1.16815, and with a clear structural floor at 1.1593–1.1590 that, once broken, opens a logical path toward 1.1550 and then 1.1520–1.1512. The DXY is pushing higher inside a rising channel near 99.5, with credible upside targets at 99.745 and 100.024, backed by 198,000 jobless claims, 7.7 and 12.6 manufacturing prints, and a 95% market-implied probability of no Fed move in January. German inflation at 2.0% y/y with 0.2% m/m gives the ECB space to cut earlier, reinforcing rate divergence against the euro. In this configuration, EUR/USD is not a buy-the-dip story. It is a Sell with a bearish bias, with the preferred strategy being to fade rebounds into the 1.1635–1.1665 band, use a structural invalidation above roughly 1.1680, and keep downside targets centered first on 1.1590, then 1.1550, and finally the 1.1520–1.1512 zone if the dollar’s move extends.

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