EUR/USD: A major technical test is on the horizon

While tensions eased in the oil market after Donald Trump stated on Wednesday that the killings in Iran had ended, the EUR/USD continued to hover near a technical pivot point close to $1.1610. Beyond the Iranian issue, however volatile it may be, currency traders are keeping a close eye on the Greenland situation, as France prepares to participate in a military mission on the island alongside other European nations.

"Following the intervention in Venezuela, President Trump has maintained his threatening rhetoric toward certain countries in recent days. One of his most insistent demands concerns the annexation of Greenland. This has heightened tensions with European countries. President Trump seems to have definitively opted for a confrontational and transactional strategy both outside and within the United States. Nevertheless, at this stage, the effects of these actions have not really impacted market developments, except to support the price of gold and, to a lesser extent, the price of oil," explain the strategists and macroeconomists at LBPAM.

"Applying an unbridled Monroe Doctrine, his 'Donroe Doctrine,' Trump seeks to control an area of ​​influence across the entire Western Hemisphere, to shock with unilateral and punitive tools (with questionable legal bases: IEEPA, Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974), and to control strategic resources (such as Venezuela's 303 billion barrels of heavy and extra-heavy crude oil, the extraction of which remains costly). The tensions over Greenland are part of this flouting of international law and even the international order," adds Sebastien Grasset, Director of Asset Management at Auris Gestion.

On the statistical front, there were no major surprises regarding producer prices and retail sales, the two main statistical releases of the day, which were slightly above or below expectations, depending on whether the core data (adjusted for volatile items) or the broader data were considered.

"Even if retail sales briefly exceeded expectations for November, it's important to remember that their momentum was virtually nonexistent in 2025 in real terms. Household consumption held up in 2025, but its growth slowed compared to its 2023/2024 trend," notes Bastien Drut, Head of Strategy and Economic Research at CPRAM.

Combined with the latest inflation figures (CPI), these reports support a monetary policy status quo following the Fed's next FOMC meeting on 28 January.

"While investors will welcome this release as further evidence of disinflationary progress, the Fed will remain in an 'observational' stance due to the uncertainty, until a certain distance can be established between the data and the government shutdown," comments Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments.

Yesterday in the EU, while monthly industrial production pleasantly surprised in the Eurozone at +0.6%, the trade surplus narrowed significantly to just 10.6 euros billion in November.

Right now, the EUR/USD is trading at $1.1604.

KEY TECHNICAL ELEMENTS
While the short-term bias remains confirmed by the relative position of the 20-day and 50-day moving averages after their crossover, the buying entry point is not optimal at this stage.

A new major technical test is looming: the 200-day moving average (in brown).

MEDIUM-TERM FORECAST
Based on the key technical factors we have mentioned, our medium-term outlook for the EUR/USD is neutral.

We will maintain this neutral outlook as long as the EUR/USD remains between the support level at $1.1608 and the resistance level at $1.1771.