Welcome to this week’s market insights, where we provide in-depth analysis and updates on key market events, technical levels, and the trading opportunities ahead. Last week saw EUR/USD remaining range-bound despite major economic releases, including the Non-Farm Payroll (NFP) report. Traders are now watching closely for structural clarity and potential trend developments.

The U.S. dollar has been under pressure due to growing concerns over potential tariffs and trade disputes. If these factors persist, we may witness the beginning of a bullish uptrend for EUR/USD. Let’s dive into the fundamental and technical factors driving this week’s market activity.

Key Fundamentals and Economic Calendar

This week is packed with high-impact economic events and geopolitical developments that could significantly influence the market.

February 11, 2025

• 01:30 AUD: Westpac Consumer Confidence Change (Feb)
• 01:30 AUD: Westpac Consumer Confidence Index (Feb)
• 02:01 GBP: BRC Retail Sales Monitor YoY (Jan)
• 17:00 USD: Fed Chair Powell Testimony

Key Impact: Fed Chair Powell’s testimony could provide crucial insights into the Federal Reserve’s stance on monetary policy amid recent inflationary pressures. Traders should pay close attention to his remarks for hints on future interest rate adjustments.

February 12, 2025

• 15:30 USD: Inflation Rate MoM (Jan)
• 15:30 USD: Core Inflation Rate MoM (Jan)
• 15:30 USD: Inflation Rate YoY (Jan)
• 15:30 USD: Core Inflation Rate YoY (Jan)
• 17:00 USD: Fed Chair Powell Testimony

Key Impact: January’s inflation data will be critical in assessing whether the Federal Reserve’s previous rate hikes are effectively curbing inflation. Market volatility is expected around these releases.

February 13, 2025

• 11:00 EUR: Industrial Production MoM (Dec)
• 15:30 USD: Retail Sales MoM (Jan)
• 15:30 USD: Retail Sales Ex Autos MoM (Jan)
• 15:30 USD: Producer Price Index MoM (Jan)
• 15:30 USD: Core Producer Price Index MoM (Jan)

Key Impact: Retail sales data is a strong indicator of consumer spending, a major driver of U.S. economic growth. Poor numbers may reinforce concerns about a slowing economy, further weakening the dollar.

February 14, 2025

• 11:00 EUR: GDP Growth Rate QoQ 2nd Est (Q4)
• 11:00 EUR: GDP Growth Rate YoY 2nd Est (Q4)
• 15:30 USD: Initial Jobless Claims (Feb 8)
• 15:30 USD: Continuing Jobless Claims (Feb 1)

Key Impact: European GDP figures will provide insight into the region’s economic resilience amid recent geopolitical tensions.

February 15, 2025

• 15:30 USD: Export Prices MoM (Jan)
• 15:30 USD: Import Prices MoM (Jan)
• 17:00 USD: Michigan Consumer Sentiment Prel (Feb)
• 17:00 USD: Michigan Consumer Expectations Prel (Feb)

Key Impact: The Michigan Consumer Sentiment report is a leading indicator of consumer confidence and spending, both of which are critical for economic stability.

Geopolitical Landscape and Market Sentiment

Beyond economic data, global geopolitical developments are contributing to market uncertainty:

• Trade Tensions: The U.S. is reportedly considering higher import duties, particularly with key trading partner Canada. If these tariffs are imposed, we may see retaliatory moves from Canada, which could disrupt trade flows and push inflation higher.
• Trump’s Influence: Former President Donald Trump’s continued legal battles and influence in American politics are creating additional market uncertainty. Speculation about his engagement with Russian and Ukrainian stakeholders has raised questions about U.S. foreign policy and international relations.
• Conflict in Ukraine: The ongoing war continues to weigh heavily on global stability. While peace talks remain a hope, tensions remain high, impacting investor confidence and risk sentiment.

Technical Analysis: EUR/USD Outlook

Despite the fundamental noise, the EUR/USD technical setup offers some clarity. On the 4-hour chart, the pair remains range-bound, with key levels in play:

• Key Support Zone: 1.02728 – This level aligns with a potential liquidity pocket and could attract buyers. If buying pressure holds, a bullish reversal targeting the minor resistance at 1.04120 seems plausible.
• Minor Resistance: 1.04120 – A significant liquidity zone. A decisive break above this level is essential for confirming continued bullish momentum.
• Major Support: 1.01580 – If the 1.02728 level fails to hold, price may gravitate toward this long-term structural base.

Potential Trading Scenarios

• Bullish Scenario: If buying pressure holds near the key support at 1.02728 and price breaches 1.04120, traders can look for long positions targeting higher liquidity zones.
• Bearish Scenario: A break below 1.02728 may signal further downside, with the next target near 1.01580.

Trading Strategy for the Week

Given the current market setup and fundamental factors, here are some key trading considerations:

1. Wait for Confirmation: Avoid jumping into trades prematurely. Wait for clear price action signals and confluences before committing to positions.
2. Risk Management: Given the potential for heightened volatility, maintain strict risk management practices. Set appropriate stop losses and position sizes.
3. Focus on Fundamentals: With critical economic releases and geopolitical developments on the horizon, staying updated on news events will be crucial.
4. Short-Term Opportunities: Given the range-bound market structure, intraday and scalp trades may present more reliable opportunities until a definitive trend emerges.

Closing Thoughts

This week holds significant potential for market movement, particularly for EUR/USD. The combination of key economic releases and geopolitical tensions suggests a volatile trading environment. As traders, patience and discipline will be essential in navigating these conditions.

Stay cautious, stay informed, and remember that these insights are for educational purposes only and not financial advice. We wish you a profitable and successful trading week ahead!

Happy Trading!