While US Treasury yields continue to climb, the US counterpart remains resilient, prompting both the USD and prices to push higher.
EUR/USD has ceded ground for the third consecutive session, with the pair trading around 1.0310 on Monday. The pair is under pressure as investors anticipate a widening interest rate gap between the US and the Eurozone.
January’s jobs report, which showed both slower job growth and a lower unemployment rate, has led the Federal Reserve (Fed) to expect interest rates to remain steady this year. Such a perspective bodes well for the US dollar while keeping the pair in bearish territory. The European Central Bank (ECB), for its part, recently lowered rates and signaled further easing in March.
Data from the US Bureau of Labor Statistics (BLS), released on Friday, showed that Nonfarm Payrolls (NFP) in January increased by 143,000, below December’s revised 307,000 and lower than the 170,000 forecast by Barclays. The unemployment rate, however, dipped to 4.0% from 4.1% in December.
President Donald Trump, speaking from Air Force One, stated that he would push for a 25% levy on all steel and aluminum imports into the US but did not specify which countries would be affected. He also suggested that additional retaliatory tariffs would be announced midweek, taking effect almost immediately and mirroring each nation’s existing tariffs, Reuters reported.
On Sunday, German Chancellor Olaf Scholz responded to the proposed tariffs, warning that if the US proceeds, the European Union (EU) will retaliate and could do so “within one hour.” Bernd Lange, who chairs the European Parliament’s trade committee, added that to avert a trade war, the EU might consider reducing its 10% import duty on vehicles to align with the US’s 2.5% tariff rate.
Fears of possible deflationary effects from these anticipated tariffs have increased expectations for larger ECB rate cuts, with markets now projecting the deposit rate to fall as low as 1.87% by December.
EUR/USD Daily Technical Analysis for February 10
The daily chart shows EUR/USD struggling near a mildly bullish 20-day SMA, while the 100-day SMA is pointing south further ahead, and the 200-day SMA remains mildly bearish. These moving averages (MAs) indicate sustained sell-side pressure but, in the short term, suggest another leg down. Additionally, bearish technical indicators are trending lower in negative territory.
Immediate support is seen at 1.0350, followed by the 1.0300 mark. A break below this level could open the way toward the weekly low of 1.0210, while January’s monthly low of 1.0177 looms. Further declines could bring parity into focus.
On the flip side, resistance is at 1.0450, followed by January’s monthly high of 1.0532. A sustained break above these levels could shift momentum in favor of the Euro.
