The Euro (EUR) eased to 1.1915 on Friday, failing to capitalize on stronger-than-expected Q4 GDP growth from Germany and the broader Eurozone. Despite the economic “beat,” the pair is under pressure from a revitalized US Dollar (USD). Investor sentiment has shifted toward the Greenback following reports that Kevin Warsh is a frontrunner for the Fed Chairmanship, a move seen as a victory for central bank independence. Furthermore, a bipartisan US spending agreement has reduced the risk of a government shutdown, lending further support to the Greenback.
The recent EUR/USD rally has stalled, with the emergence of “lower highs” over the past 48 hours signaling that sellers are gaining the upper hand. While the 1.1895 support level is currently holding, technical indicators point to a growing bearish trend. On the 4-hour chart, the MACD histogram has dipped into negative territory with expanding red bars, and the RSI is struggling to maintain its position above the critical 50 midline.
A sustained break below 1.1895 (the lows of Jan 28-29) would likely accelerate selling pressure toward 1.1850 and potentially 1.1730. Conversely, bulls face immediate resistance at the 1.2000 psychological handle and the recent peak of 1.2082.
