EUR/USD Analysis: Preparing for Further Losses – 10 February 2025

-- The fluctuations in central bank policies, economic performance, and investor risk aversion continue to negatively impact any gains in the EUR/USD currency pair.
-- The Euro's attempts to rebound last week were capped at the 1.0442 resistance level, as the bears-maintained control and the pair closed the trading week below the support level of 1.0305, following investor reactions to the US jobs data.
-- This data confirmed the ongoing strength of the US labor market, which, under the current administration, is pursuing trade wars against other global economies, potentially strengthening the US dollar as a safe-haven asset.

USD/EUR Pressures Intensified After US Jobs Data

According to forex market trading, the performance of the EUR/USD pair reacted to the announcement of US jobs data, which directly affects the future of US monetary policy. Official data revealed that job growth in the United States slowed at the beginning of the year, partly due to winter weather and wildfires in the Los Angeles area, following two months of strong job creation. With few signs of a breakdown in the labour market, the Federal Reserve is expected to remain patient on US interest rates while awaiting further progress in slowing inflation, which could remain elevated due to tariffs.

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Trading Tips:

The euro currency is still under selling pressure and may continue for a long time until investor sentiment improves, and risks begin to be taken.

Euro Ignores Recent Economic Indicators

According to the results of the economic calendar data, inflation in the euro zone accelerated unexpectedly, supporting the European Central Bank's cautious approach to cutting interest rates while the struggling economy faces increasing trade threats from the United States. The decline was mainly due to cars and machinery. On the other hand, German industrial production fell by the largest amount in five months at the end of 2024, extending the state of distress suffered by the manufacturing sector even as other data provided hope for stability. Furthermore, the Census Bureau said the decline was mainly due to automobiles and machinery.

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US Tariff Developments

In a new move by the Trump administration, US President Donald Trump halted the imposition of tariffs on low-value packages from China, apparently to give federal agencies time to figure out how to process the millions of such shipments that cross the US border each day without paying taxes. Also, the executive order did not specify when the suspension would end but said it would end when the Commerce Department can put in place "sufficient systems" to "fully and expeditiously process and collect tariff revenues."

Ending tariff exemptions on low-cost packages from China has broad bipartisan support in Washington, and Trump pulled the plug when he raised tariffs on Chinese goods by 10% earlier this week. Goods shipped via duty-free packages were subject not only to existing tariffs — 25% for many Chinese products — but also to the new 10% tariff.

This represents another pause in Trump’s policies weeks into his second administration, including his tariff orders on Mexico and Canada, which were suspended after the two allies took steps to allay his concerns about border security and drug trafficking.

EUR/USD Technical Analysis Today:

As shown on the daily chart, the general trend of the EUR/USD pair is still bearish. As we mentioned before, the bears’ move towards the support levels of 1.0330, 1.0250 and 1.0180 will accelerate the bears’ move towards the EUR/USD pair to the parity price sooner than previously expected. At the same time, all technical indicators are moving towards strong oversold levels. On the other hand, and over the same period, a break of the trend requires moving towards the resistance levels of 1.0550 and 1.0640, respectively, first.

The EUR/USD will remain bearish until investors and markets react to the US inflation figures and Fed Chair Jerome Powell's testimony.

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Original Source DailyForex.com provides daily fundamental and technical analysis and signals for those looking to trade based on trends in the currency markets.