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EUR/USD climbs for the second day in the week up by over 0.50% as the Dollar slides despite solid US economic data was released in the day. An improvement in risk appetite sponsored by US President Donald Trump dropping tariffs threats on Europe, underpins the shared currency. At the time of writing, the pair trades at 1.1743 after bouncing off daily lows of 1.1670.

Euro extends gains as easing US–Europe trade tensions outweigh strong US data and pressure the Dollar

Wall Street is poised to end Thursday’s session with gains bolstered by strong Gross Domestic Product (GDP) figures in the third quarter of 2025. Jobs data released at the same time and a slightly steady inflation print erased the chances of a rate cut by the Federal Reserve at the January meeting.

Data from Prime Market Terminal indicates that money markets expect the Fed to hold rates unchanged, with odds standing at 95%. Towards the year’s end, investors expect 42 basis points of rate cuts, below the 60 expected on January 7.

In Europe, the European Central Bank (ECB) unveiled its latest meeting monetary policy minutes in which members broadly agreed with the assessment on the economy and that underlying inflation indicators remain consistent with the central bank’s 2% medium-term goal.

Also, members of the European Union plan to unfreeze the trade dieal with the US and vote on ratification, revealed Bloomberg.

Economic schedule for January 23

The EU economic docket will feature HCOB Flash PMIs for France, Germany and the bloc. Also, the ECB President Christine Lagarde will cross the wires. In the US, traders focus will be on S&P Global Flash PMIs and the final print of the University of Michigan Consumer Sentiment.

Daily digest market movers: Traders ignore upbeat US data, drive Euro higher

• The US Department of Commerce reported that the Fed’s preferred inflation gauge, Core Personal Consumption Expenditures (PCE), rose 2.7% YoY in October and accelerated slightly to 2.8% in November, broadly in line with expectations.
• The US Bureau of Economic Analysis showed that Q3 2025 GDP grew 4.4% YoY, topping forecasts of 4.3% and improving markedly from Q2’s 3.8% pace. The expansion was driven by stronger exports and a smaller drag from inventories.
• Initial Jobless Claims for the week ending January 17 edged up to 200K from a revised 199K, but still came in well below expectations of 212K, according to data from the US Department of Labor.
• The ECB last meeting minutes struck a dovish language with policymakers acknowledging that growth remains resilient but exposed to geopolitical risks that could weigh on sentiment, tilting markets risk averse. Inflation is seen anchored near the 2% goal. Policymakers reiterated that policy is not on a preset path, maintaining their data-dependent stance.
• The US Dollar Index (DXY), which tracks the American currency's performance versus six peers, dives 0.50% down at 98.29.

Technical outlook: EUR/USD poised to challenge 1.1800 in the near-term

The EUR/USD has turned slightly neutral to upward biased after bouncing of 1.1576, near the 200-day Simple Moving Average (SMA) At 1.1590, which exacerbated the shared currency advance past 1.1600, on its way towards 1.1700.

The Relative Strength Index (RSI) shows that bulls are gathering steam. Hence, in the short-term, they have the upper hand.

For a bullish continuation, buyers must clear the December 24 peak at 1.1807. Once surpassed, the next stop would be 1.1850, followed by last year’s cycle high at 1.1918. For a bearish reversal, the EUR/USD must tumble below 1.1700, and clear key support levels like the 20-, 50- and 100-day SMAs, each at 1.11693, 1.1663 and 1.1660 respectively. If surpassed, bulls’ last line of defense would be the 200-day SMA.

(Click on image to enlarge)

EUR/USD Daily Chart

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