This week brings high-impact economic events, including inflation data from Canada and New Zealand, US employment figures, and PMI reports from Europe and the US. These releases are set to shape market sentiment and monetary policy expectations.
The EURUSD’s recent technical patterns signal potential shifts, with key support and resistance levels under close watch. Meanwhile, US trade policy developments continue to influence the dollar and global risk sentiment.
High Impact Economic Events
Thursday 15:30 (GMT+2) – Canada: Retail Sales m/m (CAD)
Thursday 15:30 (GMT+2) – USA: Unemployment Claims (USD)
Friday Tentative – Japan: BOJ Policy Rate (JPY)
Friday 10:15 am (GMT+2) – France: French Flash Manufacturing PMI (EUR)
Friday 10:15 am (GMT+2) – France: French Flash Services PMI (EUR)
Friday 10:30 am (GMT+2) – Germany: German Flash Manufacturing PMI (EUR)
Friday 10:30 am (GMT+2) – Germany: German Flash Services PMI (EUR)
Friday 11:30 am (GMT+2) – UK: Flash Manufacturing PMI (GBP)
Friday 11:30 am (GMT+2) – UK: Flash Services PMI (GBP)
Friday 16:45 (GMT+2) – USA: Flash Manufacturing PMI (USD)
Friday 16:45 (GMT+2) – USA: Flash Services PMI (USD)
Chart Analysis
Since peaking at 1.12130 on September 25, EURUSD has entered a pronounced downtrend, underpinned by a succession of bearish technical signals. The initial reversal was marked by the formation of a Shooting Star candlestick pattern, a well-established indicator of waning buyer momentum. This was soon followed by a non-failure swing reversal, characterized by a higher high at 1.12130, which quickly succumbed to a break below the critical support at 1.10007, intensifying bearish momentum.
The technical bias deteriorated further with the emergence of a “Death Cross,” where the 20-period Exponential Moving Average (EMA) crossed below the 50-period EMA, solidifying the negative outlook. This sequence of events drove EURUSD to a low of 1.01768 before a reversal emerged as buyers regained control.
This was confirmed by a failure swing pattern. Specifically, the trough at 1.02581 held above the prior low, and the price subsequently broke above the resistance level at 1.03532, signaling a shift in momentum.
Supporting the bullish recovery, momentum indicators also exhibit strengthening conditions. The Momentum Oscillator has moved above the critical 100 threshold, pointing to upward pressure, while the Relative Strength Index (RSI) remains above the neutral 50 level, reflecting sustained buying interest. These factors suggest the potential for further upside in the near term.

Key Resistance Levels
Should the buyers maintain market control, traders may direct their attention toward the four potential resistance levels below:
1.05071: The initial resistance level is established at 1.05071, which mirrors the 261.8% Fibonacci Extension drawn from the swing high, 1.03532, to the swing low, 1.02581.
1.06609: The second price target is set at 1.06609, representing the 423.6% Fibonacci Extension drawn from the swing high, 1.03532, to the swing low, 1.02581.
1.07603: The third price objective is observed at 1.07603, which corresponds with a trough marked on October 23.
1.09358: An additional upside target is projected at 1.09358, mirroring the peak from November 6.
Key Support Levels
Should the sellers take market control, traders may consider the four potential support levels listed below:
1.02581: The initial support level is estimated at 1.02581, corresponding to the swing low formed on January 15.
1.01768: The second support level is identified at 1.01768, representing the low point marked on January 13.
1.00890: The third support level is seen at 1.00890, reflecting the weekly support, S2, estimated using the standard Pivot Points methodology.
1.00013: An additional downside target is 1.00013, mirroring the weekly support, S3, estimated using the standard Pivot Points methodology.
Fundamentals
The US dollar traded near recent lows on Tuesday as investors evaluated President Trump’s latest tariff-related statements, according to a report by Yahoo Finance. On Monday, the dollar index experienced its sharpest drop since November 2023, retreating from near two-year highs after Trump opted against immediate broad-based tariffs. Instead, he directed federal agencies to assess trade policy, potentially leading to future tariffs.
Despite an initial recovery following Trump’s announcement of possible levies on Mexico and Canada by February 1, the dollar failed to sustain gains. Analysts suggest the currency’s movements reflect market uncertainty regarding the administration’s trade approach, with investors remaining cautious about potential policy shifts.
While some strategists believe the absence of immediate tariffs signals a potential peak for the dollar, others caution that trade policy uncertainties will persist. A strong dollar, if sustained, could pose challenges for US companies with overseas exposure and emerging markets reliant on dollar-denominated debt. Experts emphasize that a more balanced global economic outlook is crucial for dollar stability.
Conclusion
As the week unfolds, market participants remain focused on key economic releases and technical developments that could shape near-term price action. With critical data points from multiple economies and evolving trade policy uncertainties, volatility is expected to persist. EURUSD traders will closely monitor key support and resistance levels, while broader sentiment will hinge on the interplay between macroeconomic fundamentals and geopolitical factors. Staying adaptable to incoming data and policy shifts will be essential for navigating the current market landscape.