EUR/USD Current price: 1.0402
- Most financial markets are closed or due to an early end on New Year’s Eve.
- Expectations about another Donald Trump presidency fuel demand for the USD.
- EUR/USD stuck around 1.0400 in the last trading day of 2024.
As we wrap up 2024, the EUR/USD pair is holding steady around 1.0400, trading within a narrow range on the final day of the year. The US Dollar (USD) has emerged as the standout performer, making gains against all major currencies. While the Euro has not suffered the most, it is still down approximately 6% against the Greenback.
The re-election of Donald Trump has been a key driver behind the USD’s strength. Anticipation of Trump’s second term and the potential financial and political implications have bolstered the currency’s momentum, even before his official inauguration.
Trump’s promise to impose significant tariffs on imports from China, Canada, and Mexico has raised concerns about a resurgence of inflationary pressures. In response, the Federal Reserve (Fed) opted for a more cautious approach in its December meeting, signaling fewer interest rate cuts in 2025. This hawkish stance has further fueled demand for the USD in the final trading month of the year.
In addition, the US economy’s outperformance compared to its major counterparts has contributed to the bullish outlook for the USD. While Wall Street will be operating as usual today, bond markets are set to close early. With minimal activity expected ahead of the New Year holiday, financial markets will resume on January 2.
EUR/USD short-term technical outlook
The EUR/USD pair is currently hovering around its daily opening price, trading within a 30-pip range. The overall trend remains bearish, with the daily chart showing a downward trend in the 20 Simple Moving Average (SMA), acting as dynamic resistance around 1.0470. The 100 and 200 SMAs are also trending downwards, signaling continued selling pressure. While technical indicators have weakened, they remain in negative territory.
In the short term, the outlook is neutral-to-bearish. On the 4-hour chart, the pair is oscillating around a flat 20 SMA, with the longer SMAs maintaining their downward trajectory above the current level. Technical indicators have slightly decreased but lack clear direction, hovering around their midpoints.
Support levels: 1.0370, 1.0330, 1.0290
Resistance levels: 1.0440, 1.0470, 1.0510