EUR/USD holds its ground despite soft Eurozone inflation data

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EUR/USD holds gains at 1.1620 at the time of writing, after bouncing from seven-week lows at 1.1585 earlier on Monday.

EUR/USD remains moderately bid on Monday, with bulls capped below 1.1640, with
Eurozone HICP shows that inflation eased below the ECB's 2% target in December.
Investors remain on edge after Trump threatened EU countries with new tariffs.

EUR/USD holds gains at 1.1620 at the time of writing, after bouncing from seven-week lows at 1.1585 earlier on Monday. The softer-than-expected Eurozone final Harmonised Index of Consumer Prices (HICP) has failed to hurt the Euro (EUR), which is drawing support from a weaker US Dollar on renewed tariff threats.

President Trump jolted markets over the weekend, threatening with 10% additional tariffs on the European countries that oppose the US annexation of Greenland. Europe has responded with the possibility of retaliatory measures amid an unprecedented rift among allies that might cause an existential crisis in the North Atlantic Treaty Organization (NATO).

These events have triggered a risk-off mood in the market and a strained atmosphere ahead of the Davos Economic Forum, where US President Trump and his team will meet representatives from most of the countries targeted by the latest round of levies. Trump's speech on Wednesday is likely to be one of the highlights of the week

In the Eurozone economic calendar on Monday, all eyes are on the final HICP reading for December. The US calendar is empty amid a bank holiday in observance of Martin Luther King Jr. Day, and investors will be attentive to the third quarter's US Gross Domestic Product (GDP) and the Personal Consumption Expenditures (PCE) Price Index, both due on Thursday.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.21%	-0.20%	-0.14%	-0.20%	-0.25%	-0.49%	-0.53%
EUR	0.21%		0.00%	0.09%	0.03%	-0.03%	-0.28%	-0.32%
GBP	0.20%	-0.00%		0.08%	0.01%	-0.04%	-0.28%	-0.32%
JPY	0.14%	-0.09%	-0.08%		-0.07%	-0.12%	-0.36%	-0.41%
CAD	0.20%	-0.03%	-0.01%	0.07%		-0.04%	-0.28%	-0.34%
AUD	0.25%	0.03%	0.04%	0.12%	0.04%		-0.25%	-0.29%
NZD	0.49%	0.28%	0.28%	0.36%	0.28%	0.25%		-0.05%
CHF	0.53%	0.32%	0.32%	0.41%	0.34%	0.29%	0.05%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Daily Digest Market Movers: Trump's tariffs hurt confidence in the US Dollar

The US Dollar is the worst-performing major currency on Monday. Investors are selling the Greenback across the board amid renewed concerns about the economic consequences of Trump's uncertain trade policy.
European leaders have flagged retaliatory measures if the new levies come into effect. The heads of the 27 EU member states will meet in the coming days to decide on measures to take against the US. This is likely to keep investors on edge this week and might trigger sharp fluctuations in Euro (EUR) crosses.
In the economic calendar, the final Eurozone HICP data has been revised down to a 1.9% year-on year growth in December, down from previous estimations of a 2% reading and also below November's 2.1% growth. The Core HICP growth, however, has been left unrevised at a 2.3% year-on-year.

Technical Analysis: EUR/USD bounces up from the channel's bottom

EUR/USD trades at 1.1620 at the time of writing after bouncing up from trendline support below 1.1600. Technical indicators are bouncing higher, as the Moving Average Convergence Divergence (MACD) line on the 4-hour chart climbs above the Signal line near the zero mark, highlighting a bullish crossover, and the Relative Strength Index (RSI) edges higher, hinting at a gradual build in upside pressure.

The pair, however, has been trading within a descending channel since late December, which keeps the broader bearish trend intact. Immediate resistance is at the 1.1640 area (January 13 low) ahead of the channel's top, now at the 1.1670 area.

On the downside, supports are at the mentioned channel bottom, near 1.1580. Further down, the target is the late-November lows near 1.1560.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

Economic Indicator

Core Harmonized Index of Consumer Prices (YoY)

The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.