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• EUR/USD cycled around the ever-familiar 1.0400 level on Tuesday.
• European data remains thin this week until Friday’s PMI prints.
• Trade headlines as President Trump waffles on tariff threats will dominate market attention.

EUR/USD ground into a circle on Tuesday, marking in chart churn around the 1.0400 handle as Fiber bids struggle to find direction. European and US economic data remains thin throughout this week, with investor sentiment hinging entirely on whatever trade war rhetoric new US President Donald Trump tweets from one moment to the next.

Over the course of the current trading week, Donald Trump has waffled on his campaign promises of flat tariffs on all of the US’ trading partners on the day he took office. He brushed off his own statements to pivot to threatening new looming tariffs on Mexico, Canada, and China, ranging from 10% to 25%, to start possibly as soon as February 1, over a 48 hour period. President Trump’s ire over perceived trade slights has seen Europe drop from his revenge tariff list, leaving the Euro to get swamped out near familiar technical levels.

The Euro’s expanding interest rate differential against the Greenback has left Fiber in a technically weak position, and a steady slew of mixed messages from a parade of European Central Bank (ECB) speakers is numbing investor interest in further talking points from policymakers. ECB President Christine Lagarde is due to make yet another public appearance on Wednesday, but little of note is likely to come from the exchange.

Looking ahead, Friday will bring a fresh update of Purchasing Managers Index (PMI) business survey results from both the EU and the US. Both datasets are expected to give a mixed print.

EUR/USD price forecast
 

EUR/USD price action is getting squeezed into a breakout trap in the near term, with an immediate technical floor priced in near 1.0350 and topside momentum getting strangled by the 50-day Exponential Moving Average (EMA) near 1.0450. 

Fiber is still trading on the wrong side of the 200-day EMA near 1.0700, but the pair’s slow grind lower appears to be staging something approaching, but not quite reaching, a technical recovery.

EUR/USD daily chart
 

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