EUR/USD hits monthly peak before US jobs report and tariffs decision

The EUR/USD is currently sitting at a monthly low of 1.1640, indicating a potential decline of 0.6% this week. Surprisingly, markets seem to be overlooking the strong Eurozone retail sales data while the US dollar continues to gain traction in uncertain conditions. All eyes are on the upcoming US non-farm payrolls (NFP) report and President Trump’s decision regarding tariff policies.

Data from Eurostat revealed that retail consumption in the Eurozone increased by 0.2% in November, which was better than the stagnant growth from October and exceeded market expectations for a slight 0.1% rise. Year-over-year, retail sales rose by 2.3%, surpassing October’s 1.9% increase and the consensus of 1.6%. Still, this positive news had little effect on the euro’s performance.

On a related note, the U.S. Supreme Court is set to convene later today to determine the legality of President Trump’s use of the International Emergency Economic Powers Act of 1977 in imposing trade tariffs. A ruling against the administration could lead U.S. companies to seek refunds totaling around $150 billion for tariffs already paid on imports.
Before this, the Bureau of Labor Statistics (BLS) will provide its December non-farm payrolls report, which is the first complete employment report following the biggest government shutdown in U.S. history. Expectations hint at a modest increase in job numbers, but it may not provide a clear indication of the Federal Reserve’s future monetary policy. Additionally, the unemployment rate will be closely watched.

Today’s European session will highlight the November Eurozone retail sales report along with a speech from Philip Lane, a member of the European Central Bank (ECB) Governing Council. The significance of these events is expected to be minimal as investors await more impactful news from the U.S.

Factors that influence market movement

• Trading remains cautious as currency volatility stays low, with major currencies fluctuating within tight ranges ahead of critical U.S. announcements.
• The non-farm payrolls report is anticipated to show a gain of 60,000 jobs for December, down from a gain of 64,000 in November.
• Also, the unemployment rate is projected to decline to 4.5% from 4.6% observed in November, while wage growth is expected to accelerate by 0.3% month-on-month and 3.6% year-on-year, compared to 0.1% and 3.5% the previous month.
• The preliminary Michigan Consumer Confidence Index for January is forecasted to inch up to 53.5 from December’s 52.9.
• Lastly, weekly jobless claims rose to 208,000 for the last week of 2025, from 200,000 earlier, although this figure is lower than the 210,000 anticipated, leading to a strengthening of the US dollar post-announcement.
• Germany reported mixed statistics; industrial production unexpectedly grew, but a significant drop in exports raised concerns about the economic outlook for the region.

Technical analysis: The next bearish target for EUR/USD rests around the 1.1615 mark

The EUR/USD pair has broken below the support around the 1.1660 area, indicating that the bearish sentiment stemming from the 1.1808 high is still relevant. Technical indicators align with this perspective. The 4-hour Moving Average Convergence Divergence (MACD) histogram remains below zero, and the Relative Strength Index (RSI) has dipped to 31, nearing an oversold condition.

At present, the intraday low of 1.1644 is being pressured as bearish traders target the lows from December 8th and 9th around 1.1615. Further down the line, a noteworthy target emerges around the lows of December 1st and 2nd at 1.1590.

On the upside, the previous support level at 1.1660 now poses a hurdle, blocking the path to a downtrend line that originated from Wednesday’s high near 1.1700 and the December high currently situated at 1.1720.

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