WEF Annual Meetings in Focus: EUR/USD and EURO STOXX 50 Outlook

Market Overview

The euro faced mild pressure after the current account data fell short of expectations, coming in at 27.0B, below the forecasted 28.0B, and significantly lower than the previous 30.2B.

Meanwhile, final CPI y/y held steady at 2.4%, in line with expectations, indicating persistent inflationary pressures. The weaker-than-expected German PPI m/m at -0.1%, compared to the forecasted 0.3%, adds to concerns over slowing industrial output.

These developments could weigh on the EURO STOXX 50, as softer data may dampen investor sentiment. Looking ahead, the WEF Annual Meetings and Eurogroup Meetings may provide fresh insights into the eurozone’s economic outlook.

EUR/USD Technical Analysis

EUR/USD is trading at $1.03129, up 0.45%, showing signs of resilience above the pivot point at $1.02965. The pair is currently hovering just above the 50-day EMA at $1.02970, suggesting short-term bullish momentum. A sustained move higher could see EUR/USD testing immediate resistance at $1.03565, with further gains targeting $1.04370.

However, if the price slips below the pivot, the bearish case strengthens, with support seen at $1.02400, followed by a deeper level at $1.01844.

The broader trend remains uncertain, with the 200-day EMA at $1.04039 acting as a key hurdle for long-term buyers. For now, holding above the pivot keeps the bulls in control, but caution is warranted.

EURO STOXX 50 Fundamental Analysis

The EURO STOXX 50 climbed 0.25%, nearing a three-month high, driven by a 0.7% gain in banking stocks and a 0.4% rise in the travel sector. Investor focus is on Donald Trump’s inauguration, with concerns over potential tariff policies and their impact on European exports.

German PPI rose 0.8% year-over-year, falling short of the expected 1.1%, signaling softer industrial activity. The ECB is expected to cut rates by 0.25% at its upcoming meeting.

EURO STOXX 50 Technical Analysis

EURO STOXX 50 is trading at 5157, up 0.25%, maintaining a bullish stance above the pivot point at 5136. The index is currently well-supported by the 50-day EMA at 5057, reinforcing the upward momentum. If the price continues to hold above this level, the next key resistance stands at 5215, with a further target at 5261, potentially paving the way for higher gains.

On the downside, a break below 5136 could see the index retreating towards immediate support at 5089, with a deeper correction likely to test 5021. The 200-day EMA at 4974 remains a crucial long-term support level. Holding above the pivot keeps the outlook positive, but a drop below could shift sentiment quickly.