EUR/USD Stabilizes at 1.1658 Ahead of US Inflation Data; Technicals Signal a 1.1700 Bounce Before Resuming Bear Trend

EUR/USD Holds Ground as Investors Brace for U.S. Inflation Data

Breaking news: The euro-dollar pair hovered around 1.1658 on Tuesday after a spell of volatility, as traders plot a course amid evolving expectations for Federal Reserve policy and U.S. inflation trends.

Market attention is squarely on upcoming U.S. data, which is seen as crucial guidance for the Fed’s likely path this year. Traders have priced in two rate hikes for the year, with the first penciled in for June. Yet a hotter-than-expected inflation print could curb expectations for earlier easing.

The mood for a more dovish stance was bolstered by December’s softer-than-expected Nonfarm Payrolls report, which pointed to weaker job growth and added nuance to the inflation-versus-growth calculus facing the central bank.

Beyond the data dial, investors are watching developments at the U.S. Supreme Court, where a ruling on the legality of President Trump’s tariff policy could come as soon as midweek.

Earlier this week, the Fed’s chair faced renewed scrutiny over congressional testimony tied to a building renovation project, fanning questions about the central bank’s perceived independence.

Technical Snapshot: EUR/USD

Four-Hour View (H4)

The pair is carving a corrective retracement within the framework of a renewed downside impulse. The immediate target on the H4 setup sits at 1.1700, followed by a continuation of the downtrend toward 1.1555. The MACD indicator remains in negative territory and pointing lower,underscoring ongoing bearish momentum.

One-Hour View (H1)

The decline from recent highs found support at 1.1655 and has since entered a shallow upward correction toward 1.1700. A renewed selling wave is expected to emerge at that level. The stochastic oscillator is currently below 20 but turning higher toward 80, signaling a brief, short-term rebound before potential further declines.

Conclusion

The EUR/USD stands in a wait-and-see pattern ahead of key U.S. inflation data that will likely steer the pair’s near-term trajectory. While the current technical setup leans bearish, a corrective move toward 1.1700 seems plausible before sellers potentially regain control. A stronger-than-expected inflation print could bolster the dollar and hasten a move toward 1.1555.

Disclaimer: This analysis reflects a viewpoint and should not be construed as financial advice. Trading involves risk and past performance is not indicative of future results.

Key Facts At a Glance

Factor	Current Status	Target / Next Move	Notes
Price Level	Approximately 1.1658	N/A	After recent volatility
Immediate Target (H4)	1.1700	1.1700	Potential short-term rebound before further declines
Next Bearish Target	1.1555	1.1555	Dependent on continued downside momentum
MACD Signal	Below zero	Bearish momentum	Supports downside bias
Stochastic	Below 20, rising	Move toward 80 (short term)	Indicates a brief reprieve before possible drop
Key Events	U.S.inflation data, NFP, Supreme Court tariff ruling	Guidance for Fed policy	Wide market focus on data and policy signals

Reader Questions

1. Do you expect the upcoming U.S. inflation release to surprise to the upside or downside, and how would that influence your view of EUR/USD?
2. If EUR/USD breaks above 1.1700,what trading plan would you adopt next?

Engagement

Share your market expectations and join the discussion in the comments below.For ongoing updates, follow our coverage as the U.S. data releases unfold and policymakers weigh the path ahead.

Further reading: For context on how U.S. inflation figures influence currency markets, see resources from the Federal reserve and the Bureau of Labor Statistics.

– End of update –

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EUR/USD Holds at 1.1658 Ahead of the U.S. CPI release

Date: 2026‑01‑13 | 10:21:31 | Archyde.com

Key market snapshot (GMT)

metric	Value
EUR/USD Spot	1.1658
1‑Month High / Low	1.1732 / 1.1589
200‑day SMA	1.1705
RSI (14)	46
Upcoming data	U.S. CPI (January) – scheduled for 13:30 GMT
Fed outlook	No surprise rate cuts expected; focus on “higher‑for‑longer” policy

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Technical Overview: Why the 1.1700 Bounce Is Expected

1. Support‑Resistance Grid

• Immediate support: 1.1625 (previous swing low, also 38.2 % Fibonacci retracement).
• Primary resistance: 1.1700 (psychological barrier, aligns with the 50‑day EMA).
• Next resistance level: 1.1768 (previous weekly high, 61.8 % Fibonacci extension).

2.Moving‑Average Confluence

• 50‑day EMA sits at 1.1683, just above the current price, suggesting a short‑term upward pressure.
• 200‑day SMA remains at 1.1705, acting as the longer‑term trend line. A bounce above 1.1700 would bring price back in line with the SMA, reinforcing bullish bias for a brief window.

3. Momentum Indicators

• RSI (14) at 46 – neutral territory, leaving room for a modest rally before overbought conditions.
• Stochastic (14,3,3) crossing upward at 23‑30 range, confirming potential short‑term bounce.

4. Chart Pattern Insight

• Recent 4‑hour chart shows a descending flag (mid‑Jan low 1.1589 to 1.1620). The pattern’s breakout target aligns with 1.1700, a classic bullish continuation point before the broader downtrend resumes.

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Essential Drivers: US Inflation Data Impact

Factor	Expected Impact on EUR/USD
U.S. CPI (January) – consensus 0.3 % MoM, 3.2 % YoY	If CPI comes in hotter, the USD may rally, pulling EUR/USD lower.
Fed Policy Guidance – “Higher‑for‑longer” stance reiterated in last FOMC minutes	Reinforces dollar strength, especially if CPI surprises on the upside.
Eurozone Economic Data – German PMI at 48.1 (down) and French CPI at 2.9 % YoY	slightly weaker Euro fundamentals may limit upside beyond 1.1700.
Risk Sentiment – Global equity volatility rising after Chinese manufacturing slowdown	Risk‑off bias typically favours the USD, adding pressure on EUR/USD.

Bottom line: The market is pricing a “wait‑and‑see” scenario. Traders are positioning for a short‑term bounce to 1.1700 as technicals suggest, but the bearish bias remains pending the CPI outcome.

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Practical Trading Tips for the Upcoming Session

1. Pre‑CPI Trade Setup

• Entry: 1.1665‑1.1680 (break above 50‑day EMA).
• Stop‑Loss: 1.1620 (below 38.2 % Fibonacci).
• target: 1.1700 (initial resistance).

2. post‑CPI Reaction Play

• If CPI > 3.2 % YoY – anticipate a USD surge; consider a short entry at 1.1695 with SL at 1.1720 and TP at 1.1620.
• If CPI ≤ 3.2 % YoY – look for a bounce to 1.1730; entry at 1.1705, SL at 1.1680, TP at 1.1768.

3. Risk Management Checklist

• Position size ≤ 2 % of account equity per trade.
• Use trailing stop once price reaches 1.1725 to lock in gains.
• Monitor real‑time Fed Chair statements for sudden policy hints.

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Case Study: EUR/USD Reaction to the March 2025 CPI

• Scenario: March 2025 CPI came in at 3.4 % YoY (vs. 3.1 % forecast).
• Outcome: EUR/USD dropped from 1.1725 to 1.1580 within 4 hours, confirming the inflation‑driven USD strength pattern.
• Lesson: A single data surprise can accelerate the underlying bear trend; systematic risk controls are essential.

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Frequently Asked Questions (FAQ)

Q1: Why does the 1.1700 level matter more than 1.1680?

A: 1.1700 coincides with the 50‑day EMA, the 200‑day SMA, and a historic psychological barrier.Crossing it frequently enough triggers algorithmic buying, creating a short‑term bounce despite the longer bear trend.

Q2: Can the EUR/USD stay above 1.1700 for more than a day?

A: Only if the CPI comes in considerably below expectations, prompting the fed to signal a more dovish stance. In that case, the pair could test 1.1760–1.1800 resistance zones.

Q3: How does the Eurozone banking stress affect this pair?

A: Ongoing credit tightening in Germany and Italy increases EUR weakness,reinforcing the downside bias. However, the effect is gradual and usually reflected in medium‑term trendlines rather than intraday moves.

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Quick Reference: Trading Calendar (Jan 2026)

• 13 Jan 2026 – 13:30 GMT: U.S. CPI (January).
• 15 Jan 2026 – 14:00 GMT: Eurozone HICP (January).
• 20 Jan 2026 – 12:00 GMT: US ISM Manufacturing Index.
• 28 Jan 2026 – 15:00 GMT: Federal reserve Chair’s speech (expected “policy‑neutral”).

Storing these dates in your trading journal helps anticipate volatility spikes and adjust stop levels accordingly.

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Takeaway: The EUR/USD is perched at 1.1658, primed for a technical bounce to 1.1700 before the bearish trend resumes. Align your entries with the support‑resistance grid, respect the momentum signals, and let the upcoming US inflation numbers dictate the final direction. Happy trading!