EUR/USD Price Forecast - Eur Stalls Below 1.1925 as Soft US Data Pressures Dollar Ahead of NFP

EUR/USD – macro and price context around 1.1900

Price structure and near-term ranges on EUR/USD

EUR/USD is pinned around 1.1900 after rejection at the February high near 1.1925 and below the late-January peak around 1.1975. The pair is still about 1.1% above last week’s lows, so the rebound phase is intact, but the 1.1925–1.1975 band is behaving as a clear supply zone. On the 4-hour chart, EUR/USD is moving sideways between the 38.2% and 50% Fibonacci retracements of the late-January selloff, with support concentrated around 1.1885–1.1890 and resistance near 1.1925–1.1950. As long as price holds above 1.1890 and the rising trendline from the mid-January low near 1.1600, the structure stays mildly bullish, but fading momentum signals that the next impulse will be decided by US labor data and the depth of expected Fed cuts later in 2026.

US demand, labor costs and the impact on USD side of EUR/USD

US macro releases explain why the USD is under pressure while EUR/USD holds bid near 1.1900. December Retail Sales were flat at about $735 billion, against a 0.4% expected increase and after a 0.6% rise in November. The Retail Sales Control Group slipped 0.1%, with November revised down to 0.2% from 0.4%. That combination weakens the consumption pillar that drives close to 70% of US GDP and has forced downward revisions to Q4 2025 growth projections. In parallel, the Employment Cost Index slowed to 0.7% quarter-on-quarter in Q4 from 0.8%, with the annual rate at its softest pace since 2021. Slower wage and benefit growth removes some pressure on the Federal Reserve to keep policy highly restrictive. Fed-funds futures now price roughly a 75% probability of a first cut in June 2026 and between two and three cuts by December, versus the Fed’s own indication of a single 25-basis-point move. This divergence is the core driver pushing the US Dollar Index down toward 96.50–96.60 and supporting EUR/USD on dips into the high-1.18s.

DXY technical structure and what it signals for EUR/USD

On the technical side, the DXY trades around 96.55–96.61 on the 4-hour chart after multiple failures to break above the 97.60–97.80 resistance zone. Price remains below a descending trendline from the late-January high, and current price action is pressing the 0.236 Fibonacci support near 96.34, aligned with an ascending trendline from the 95.55 low. A clean break below 96.30 would open downside toward 96.02 first and then the 95.55 floor. On the upside, resistance sits at 96.83 (0.382 Fib) and 97.22 (0.5 Fib), with the 50-period moving average near 97.20 and the 100-period around 97.98 still capping any deeper recovery attempt. For EUR/USD, a weak NFP print, especially below roughly 40K jobs versus the 70K consensus, would likely extend the DXY move toward 95.55 and mechanically pull the pair through 1.1950 and 1.1985 toward the next upside objective near 1.2080. A stronger-than-expected labor print would not fully reverse the dollar downtrend but would slow the advance in EUR/USD and could drag price back into the 1.1835–1.1885 demand region.

Labor report risk: NFP scenarios and transmission into EUR/USD

The delayed January Nonfarm Payrolls release is the main event for the cross. The baseline forecast is 70K new jobs after 50K in December, with the unemployment rate steady at 4.4% and average hourly earnings easing to 3.6% year-on-year from 3.8%. Official commentary from the White House has already framed job creation as likely to remain subdued, citing migration constraints and productivity gains, which biases expectations toward the lower side of forecasts. If payrolls print materially below 70K, especially under 40K, markets will reinforce the current pricing of two to three cuts in 2026 and may begin to discuss a more front-loaded easing path. That would be USD-negative and bullish for EUR/USD, favoring a clean break of 1.1950 and 1.1985 and a move toward the 1.2080 region. If the report surprises to the upside closer to 100K–120K with wages holding near or above 3.6%, the USD would recover toward 96.80–97.20 on the DXY, limiting the upside in the pair and increasing the risk of a retest of 1.1890, then 1.1835–1.1815.

ECB tolerance for EUR strength and how it frames EUR/USD upside

On the European side, the key variable is how much appreciation in EUR/USD the European Central Bank can tolerate before signaling discomfort. Prior remarks flagged 1.20 on the cross as a sensitive level, and survey data shows that around 34% of market participants see the 1.25 area as the zone where the ECB might consider an additional rate cut, with another 23% pointing to 1.30 as a threshold. About 20% of respondents expect the ECB to ignore the exchange rate at almost any level, but in practice the 1.20–1.25 corridor is clearly monitored. When EUR/USD briefly traded above 1.20 last week, the pair was roughly 3% stronger than the ECB’s December 2025 assumption, while oil prices were about 5% above that same baseline. The stronger EUR injects disinflation pressure, but the higher oil price partly offsets that effect by raising imported energy costs. Because both shocks would need to persist to materially alter long-term inflation, the ECB’s reaction has been measured. Current projections still see EUR/USD around 1.20 by year-end, rather than assuming a forced ceiling far below that band. For the cross, this means upside toward 1.20 is not a policy problem, while sustainable moves toward 1.25 would start to bring the ECB reaction function into play.

Short-term technical map: supports, resistances and signals on EUR/USD

From a pure chart perspective, EUR/USD is trading around 1.1910–1.1916, just above a key breakout zone near 1.1890 that has flipped from resistance to support. Candlesticks between 1.1930 and 1.1950 show small bodies and upper shadows, which confirms supply in that band and some hesitation to commit fresh longs ahead of NFP. The pair is supported by a rising trendline from the mid-January 1.1600 low, with the 50-period moving average around 1.1850 and the 100-period near 1.1765 reinforcing the broader bullish bias. On momentum, the MACD remains positive but the MACD line is close to crossing below the signal line, a potential short-term bearish trigger, while the RSI above 60 reflects moderate bullish strength rather than overbought conditions. A firm break above 1.1950 would target 1.1985 and then 1.2080; a decisive move below 1.1885–1.1890 would expose 1.1835 first and then the 1.1815 zone tied to recent lows and prior demand.

Intraday behavior and indicator alignment on EUR/USD

Intraday action shows EUR/USD still respecting the 1.1900 handle and holding above the 50-period EMA on the lower timeframes, while short-horizon RSI gauges have turned up from oversold conditions. Economies tracking the cross emphasize that price continues to trade above 1.1900 and above the EMA50 while fresh positive RSI signals emerge after earlier oversold readings, usually a pattern that precedes renewed tests of overhead resistance rather than a clean breakdown. The key watchpoint is whether the looming MACD bearish crossover on the 4-hour chart triggers sustained selling or simply reflects consolidation within the broader uptrend from 1.1600. As long as closing prices hold above 1.1885–1.1890, the balance of evidence points toward further attempts to clear 1.1925 and 1.1950 instead of an immediate slide back to 1.1815.

Policy mix, oil prices and the medium-term EUR/USD narrative

The medium-term narrative for EUR/USD is defined by an asymmetric policy mix. On one side, the Fed faces slowing consumption, softer labor-cost growth and a DXY sliding toward the mid-90s as markets price two to three cuts in 2026, compared with the Fed’s more conservative guidance. On the other, the ECB is dealing with a stronger EUR but also with oil trading about 5% above its December 2025 assumption when EUR/USD was around 3% stronger than forecast. That combination means the disinflationary impact of the exchange rate is not acting in isolation and is partly offset by energy-driven price pressure. As long as the cross trades in the 1.18–1.20 corridor, the ECB is unlikely to respond aggressively to currency moves, leaving the USD side as the primary driver of direction. Sustainable trades toward 1.25 would change that calculus and bring exchange-rate considerations more directly into the policy debate.

Trading levels, risk bands and directional bias on EUR/USD

The trading map is clear. On the upside, 1.1925–1.1950 is the first critical band, defined by February’s high, the 50% Fib of the last leg and repeated rejection wicks. A confirmed break and close above 1.1950 opens 1.1985 as the next resistance, followed by 1.2080 if the DXY extends its slide toward 95.55. On the downside, 1.1890–1.1885 is the immediate pivot; losing this zone on a closing basis would bring 1.1835 into focus, then 1.1815, and below that the 1.1765 area around the 100-period moving average and the broader 1.1700–1.1760 support cluster. While those lower levels are not in play as long as the Fed-cut narrative dominates, they define the risk if NFP or subsequent data forces a repricing in favor of the USD. Taking the current macro, technical and policy signals together, the bias remains bullish for EUR/USD while the pair trades above 1.1885–1.1890 and the rising mid-January trendline, with pullbacks into support more likely to attract buying than to start a sustained downtrend as long as the DXY stays under the 97.20–97.80 resistance band.

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