In the final trading of 2024, the EUR/USD price experienced a failed bullish attempt, unable to breach $1.0458 resistance.
Subsequently, the price resumed its broader downtrend, settling around the $1.0372 support level, near a two-year low.
The recent euro gains, fueled by higher-than-expected Spanish inflation, were short-lived. A valid question remains: why did the Euro respond to Spain?
Economists note that inflation is rising faster in Spain than elsewhere in the Eurozone. This confirms a recent statement by an ECB Governing Council member suggesting that the next ECB interest rate cut may be delayed due to the resurgence of inflation.
EUR/USD Analysis: Potential for Continued Losses in 2025
Forex market forecasts indicate a continuation of the bearish momentum for the EUR/USD pair into January 2025. Analysts highlight historical underperformance of the euro against the US dollar during January, coupled with prevailing USD strength, which may lead to stronger downward breakouts for the EUR/USD in the near term.
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Recent performance validates our technical view that the Euro will remain under downward pressure, with any upward rebounds likely to be temporary.
US Stock Markets: Possible Closure Due to Exceptional Event
It has been officially announced that US stock markets will be closed on January 9, 2025, to observe a National Day of Mourning for former President Jimmy Carter. The New York Stock Exchange, Nasdaq, and CBOE Global Markets will suspend trading. CME Group has not yet released a statement regarding its plans. The US bond market will close at 2:00 PM EST, as advised by SIFMA. These market closures are consistent with a well-established US tradition.
EUR/USD Today Analysis:
The EUR/USD’s dominant trend remains bearish, increasing the likelihood of a move toward parity if the euro’s weakness continues. The US dollar is strengthened by Trump’s trade policies and its status as a safe-haven currency. Technically, recent gains pushed the EUR/USD above its nine-day EMA, marking a positive technical signal. However, a close above 1.0432 is needed to confirm further gains, with the first real test being the US non-farm payrolls report next Friday.
The general expectation is that the upcoming US non-farm payrolls report will confirm the ongoing strength of the US labor market, thus supporting the Federal Reserve’s decision to halt interest rate increases. However, a significant surprise would be a weaker-than-forecast jobs report, which could cause the US dollar to weaken. But given the survey data available, that is considered unlikely, and the US dollar could maintain its position of strength.
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