EUR/USD Analysis: Struggles to Rebound – 13 February 2025

-- For three consecutive trading sessions, the EUR/USD currency pair has been trying to rebound upwards, but its gains have not exceeded the 1.0430 level before settling around the 1.0395 level.
-- This is following the announcement of better-than-expected US inflation data, along with important new statements from US Federal Reserve Chairman Jerome Powell that supported the US dollar's gains once again, in addition to a positive momentum from the demand to buy the US dollar as a safe haven.

US Inflation Figures Favor Dollar Strength

According to economic calendar data, inflation in the United States accelerated last month, which was a disappointment for households and businesses struggling with rising costs and is likely to confirm the Federal Reserve's determination to delay further cuts in US interest rates. According to an official report, the US Consumer Price Index rose 3% in January compared to the previous year, up from 2.9% in the previous month. It has risen from a 3.5-year low of 2.4% in September.

The new economic data shows that inflation has remained stubbornly above the Federal Reserve's 2% target for almost six months after falling steadily for about a year and a half. Rising prices have become a major political obstacle for former President Joe Biden. For his part, President Donald Trump has pledged to cut prices on "day one" if elected, although most economists fear that the numerous tariffs, he has proposed could temporarily increase costs.

Clearly, the unexpected rise in inflation could dampen some of the business enthusiasm that emerged after Trump was elected on promises to cut regulation and cut taxes. Following the data, according to stock trading platforms… The Dow Jones Industrial Average fell 400 points in midday trading. Bond yields rose, a sign that traders expect inflation and interest rates to remain high.

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Trading Tips:

We still recommend selling the euro/dollar from every upward level, as the negative pressure factors on the euro are still the strongest. Thus, the US dollar will in return remain supported by Trump's policies

European Stocks Record Gains

During yesterday's trading session, European stock market indices recovered from their losses and closed slightly higher, continuing their recent gains, as strong corporate earnings outperformed expectations of a more hawkish Federal Reserve this year. According to the trades, the Stoxx 50 index for the Eurozone closed 0.3% higher at a 25-year high of 5406. Meanhwile, the Stoxx 600 European index rose 0.1% to a new all-time high of 548. In terms of monetary policy, European yields rose after the US headline and core inflation rates were higher than expected, which supported expectations that the Federal Reserve may refrain from cutting interest rates this year.

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EUR/USD Technical Analysis Today:

Keep in mind that the bears have stronger control over the performance of the EUR/USD currency pair, and this performance may remain the same for some time. Furthermore, there will be opportunities to move towards the Euro Dollar parity if the bears succeed in moving towards the support levels of 1.0320, 1.0250, and 1.0180 respectively. Technically, the direction of technical indicators is still bearish and has room before moving towards strong oversold levels. Conversely, and according to the performance on the daily chart, the initial break of the trend will not occur without moving towards the resistance levels of 1.0550 and 1.0630 first.

Today, the performance of the Euro-Dollar will be affected by the reaction to the future of Trump's trade and political policies and further US inflation readings.

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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.