EUR/USD Eyes 1.20 but US Data Will Dictate the Next Move

EUR/USD Eyes 1.20 but US Data Will Dictate the Next Move

The EUR/USD pair is hovering close to the psychologically significant 1.20 level, but markets remain cautious. Despite elevated upside risks, analysts warn that the US Dollar’s direction will ultimately determine whether the Euro extends gains or faces a reversal.

Market Outlook:

According to analysts, “Our baseline is that EUR/USD settles lower from here—toward 1.15–1.16—as markets’ dovish Fed bets prove misguided. However, we recognize that upside risks are currently elevated pending incoming data.”

Markets will likely hold off on aggressive moves until Monday’s German economic data is released, which could provide clarity on the European Central Bank (ECB) outlook.

ECB in Focus:

Today, speeches from ECB Governing Council members—Francois Villeroy, Olli Rehn, and Piero Cipollone—may offer insight into how policymakers are reacting to falling oil prices and recent hawkish repricing of the Euro curve.

Technical Levels to Watch:

• Resistance: 1.2000
• Support: 1.1720 / 1.1600
• Bias: Neutral-to-Bullish (Short term), Bearish (Medium term unless confirmed by data)

Related Read: What Falling Oil Prices Mean for ECB Policy