ECB’s Lagarde Signals Vigilance; Euro Bears Persist – Analysis for EUR/USD, EUR/JPY, EUR/GBP

Market Overview

The Euro (EUR) remained steady as mixed German data and ECB President Christine Lagarde’s comments shaped sentiment. German Import Prices rose 0.9% (Forecast: 0.5%), while Belgian NBB Business Climate fell to -13.8, reflecting economic uncertainty.

Lagarde expressed optimism about nearing the ECB’s 2% inflation target, with the latest inflation reading at 2.2%. However, she flagged persistent inflation in the services sector at 3.9%, noting it has been “not budging much.”

Lagarde also highlighted key growth disparities between Europe and the US, driven by energy costs and furlough schemes. With German banks closed for Christmas, limited updates are expected this week, leaving EUR trading subdued. Lagarde cautioned against retaliatory trade measures, warning of global economic harm.

EUR/USD – Technical Analysis

The EUR/USD pair is trading at $1.04137, reflecting a 0.15% decline as sellers remain in control below the pivot point at $1.04473. A key downward trendline is creating a significant hurdle near this level, limiting bullish momentum. Immediate resistance lies at $1.05128, with the next at $1.05916, while support is found at $1.03426, followed by $1.02760.

Technical indicators reinforce the bearish bias, with the 50-day EMA at $1.04286 hovering below the 200-day EMA at $1.04926. This alignment underscores continued selling pressure.

Unless the pair breaks above $1.04473, the bearish sentiment is likely to persist. A successful breach of this level could shift momentum towards testing higher resistance zones.

EUR/GBP – Technical Analysis

The EUR/GBP pair is trading at 0.82924, down 0.08% as bearish sentiment prevails below the pivot point at 0.83118. A downward trendline near this level continues to act as a significant barrier, capping any upward momentum.

Immediate resistance is located at 0.83449, with the next level at 0.83734. On the downside, support levels are identified at 0.82701 and 0.82249. Technical indicators suggest a bearish bias, with the 50-day EMA at 0.82804 positioned slightly below the 200-day EMA at 0.82849.

A break below 0.82701 could extend losses further, while a decisive move above 0.83118 may signal a shift in sentiment toward testing higher resistance levels.

EUR/JPY – Technical Analysis

The EUR/JPY pair is trading at 163.208, inching up by 0.04% as bullish momentum strengthens above the pivot point at 162.354. A previously breached resistance level at 162.354 has now turned into a solid support, reinforcing the upward trend. Immediate resistance lies at 163.801, with the next target at 164.988. On the downside, support levels are identified at 161.073 and 159.872.