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EUR/USD fell to a new yearly low beneath 1.1600 on Thursday, courtesy of solid economic data in the US and broad US Dollar strength. Traders’ appetite improved due to Trump moderating his rhetoric on Iran, while data in the Eurozone, failed to underpin the shared currency. The pair trades at 1.1605, down 0.35%.

US Dollar advances on solid data, traders reducing Fed cut bets

Wall Street ended the session with gains, a reflection of risk appetite. Upbeat earnings of Taiwan Semiconductor Manufacturing Co. (TSMC) pushed US equity indices higher, while the Dollar was boosted by a solid jobs report.

The number of Americans filling for unemployment benefits dipped below estimates and the previous week report. That report and speeches by Federal Reserve officials pushed investors to trim their best of further Fed easing in 2026.

Monay markets had priced 46 basis points of easing, down from 52 during Thursday’s open, according to Prime Market Terminal interest rate probability tool.

Moreover, traders digested speeches by Regional Fed Presidents Schmid, Daly, Paulson, Barkin, Bostic and the Fed Governor Michael Barr.

In Europe, the docket was scarce with the release of the Eurozone’s Industrial Production report in November and the release of inflation data in France and Spain, both readings for December.

What’s in the calendar for January 16?

The Eurozone economic schedule will feature inflation in Germany and Italy. In the US, investors will digest Industrial Production figures for December, along with the continuation of the Fed parade.

Daily digest market movers: Euro tumbles at the mercy of the Dollar

• US Initial Jobless Claims for the week ending January 10 fell to 198K from 207K, comfortably below forecasts of 215K, underscoring continued resilience in the labor market.
•  Manufacturing indicators also improved. The New York Empire State Manufacturing Index rebounded in January, rising from -3.7 to 7.7; while the Philadelphia Fed Manufacturing Survey far exceeded expectations, jumping to 12.6 versus estimates of -2, signaling a broad-based pickup in regional factory activity.
• The Greenback reacted positively, rallying to a new yearly high, with the US Dollar Index, which tracks the buck’s value versus six currencies, is up 0.30% at 99.35.
• Federal Reserve officials delivered a range of views on the policy outlook. Jeffrey Schmid said monetary policy is not particularly restrictive, cautioning that there is no room for complacent inflation. Mary Daly struck a more balanced tone, saying she expects solid economic growth and that policy is well positioned.
• Meanwhile, Thomas Barkin noted that inflation remains elevated, though he sees signs of stabilization in the labor market. Earlier, Atlanta Fed President Raphael Bostic said growth is likely to run above 2% but warned that persistent inflation pressures argue for a restrictive stance. Chicago Fed President Austan Goolsbee added that the latest jobless claims data was unsurprising, reiterating that the Fed’s core priority is returning inflation to the 2% target.
• Industrial Production in the EZ exceeded forecasts in November, rising 0.7% MoM, defying estimates for a slowdown to 0.5%. On an annual basis, output growth accelerated to 2.5%, up from 2.0% in October and above the 2.0% consensus estimate.

Technical outlook: EUR/USD slumps towards 1.1600 as it turns bearish

EUR/USD consolidates, yet it briefly cleared 1.1600 to hit a year to date (YTD) low of 1.1593, before recovering the 1.1600 figure. Momentum continues to favor sellers as depicted by the Relative Strength Index (RSI), which stays below its neutral 50 level, signaling that bears retain the upper hand.

For a bearish continuation, sellers must clear 1.1600, which would bring the 200-day SMA at 1.1582 into play. A clear break beneath that level would expose 1.1500, ahead of a deeper move toward the August 1 low at 1.1391.

On the upside, a decisive break above 1.1700 would open the way toward the 1.1750 mark. A sustained move beyond that zone would shift focus to the 1.1800 handle.

(Click on image to enlarge)

EUR/USD Daily Chart

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