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• EUR/USD waffled on Monday, stuck near 1.0400 ahead of the midweek holiday.
• Global markets are set to go dark during the New Year’s holiday session.
• Mid-tier German labor figures, US ISM PMI data are the key releases this week.

On Monday, EUR/USD dipped below the 1.0400 mark as the market navigates the year-end holiday period. Trading volumes are low, and investors are hesitant to make significant moves, leading to a decline in risk appetite, affecting most asset classes and pushing them to the lower end of their recent ranges.

German stock markets will close on Tuesday and Wednesday for the New Year’s Eve and New Year’s Day holidays. The final HCOB Manufacturing Purchasing Managers Index (PMI) data for Germany is expected on Thursday; however, the final figures are not likely to generate significant momentum for the Euro. Additionally, labor statistics for Germany, including a projected increase in December's Unemployment Change to 15K from 7K, will be released on Friday.

The primary data to watch this week will be the US ISM PMI figures for December, scheduled for release on Friday. The ISM Manufacturing PMI is forecasted to decrease slightly to 48.3 from 48.4. Throughout the latter half of the week, several Federal Reserve policymakers are expected to speak, aiming to clarify and reassure the market regarding the Fed’s recent adjustments to anticipated rate cuts in 2024.

EUR/USD price forecast
 

As EUR/USD rebounds to the lower end of 1.0400, the recent price floor around 1.0350 becomes crucial. The price has gradually decreased since the Fiber began its decline from the September highs just above 1.1200.

While it has not yet dropped below the mid-November low of 1.0332, EUR/USD is on track to finish in the negative for a fifth straight week. Observers focusing on longer timeframes will notice that the Fiber has closed lower in all but two of the last 13 weeks.

EUR/USD daily chart
 

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