EUR/USD Price Forecast: Edges Higher but Faces Resistance at 100-Day EMA
By Lallalit Srijandorn, FXStreet — January 12, 2026
The EUR/USD currency pair is showing modest gains during early Monday trading in the European session, inching up to approximately 1.1655. Despite this upward movement, the pair is encountering resistance just below the 100-day Exponential Moving Average (EMA) level, which currently stands around 1.1665. Market participants are closely watching technical indicators and upcoming economic data, as uncertainties surrounding U.S. Federal Reserve (Fed) independence continue to influence price action.
Market Drivers: Fed Independence Concerns and Geopolitical Tensions
The U.S. dollar (USD) has softened against the euro (EUR) amid heightened worries about the Fed’s autonomy. Fed Chair Jerome Powell recently revealed that the U.S. Justice Department has threatened him with criminal charges related to his Senate testimony last June regarding the estimated $2.5 billion renovation project. Powell declared this move “unprecedented,” warning it undermines the central bank’s independence—a key pillar for maintaining market confidence and effective monetary policy.
This development is pressuring the greenback, creating a tailwind for the EUR/USD. Traders are also awaiting the U.S. Consumer Price Index (CPI) inflation report due on Tuesday, which could provide crucial insights into future Fed policy decisions.
Conversely, geopolitical risks are complicating the picture. News reports of hundreds of deaths amid protests in Iran have sparked fears of escalating instability. U.S. President Donald Trump has issued warnings about potential repercussions if Iranian authorities target civilians, while Tehran has cautioned the U.S. and Israel against intervention. These tensions tend to bolster safe-haven demand for the USD, potentially counterbalancing current weaknesses.
Technical Analysis: Resistance at 100-Day EMA and Indicators to Watch
From a technical perspective, the 100-day EMA at 1.1665 represents a critical near-term resistance level for EUR/USD. The pair has been capped below this moving average, which, however, is trending gently upwards, signaling a mildly improving medium-term outlook.
Price action is currently sitting close to the lower Bollinger Band at 1.1650, indicating a potential for downward extension amid moderate expansion in volatility. This level acts as the initial support zone to monitor. A daily close above the 100-day EMA would help stabilize the tone and could pave the way for further upside momentum.
Momentum indicators remain subdued. The Relative Strength Index (RSI) has climbed to 41 from recent lows but stays below the neutral 50 midpoint, implying restrained buying pressure. Should the EUR/USD gain strength, resistance levels to watch include the Bollinger middle band at 1.1728 and the upper band near 1.1817, which could cap any extended recovery.
Looking Ahead: Key Levels and Upcoming Events
- Resistance levels: 1.1665 (100-day EMA), 1.1728 (Bollinger middle band), 1.1817 (Bollinger upper band)
- Support levels: 1.1650 (lower Bollinger Band), 1.1640 (psychological support zone)
Upcoming data releases, notably the U.S. CPI inflation report and Eurozone Sentix Investor Confidence figures, will likely influence market sentiment and directional bias. Investors should remain alert to developments surrounding Fed governance and global geopolitical stability, both of which remain significant risk factors.
Understanding the Euro and Its Influences
The euro is the official currency of 20 European Union countries in the Eurozone and ranks as the second most traded currency globally, representing around 31% of all foreign exchange transactions. Its value is heavily influenced by the European Central Bank (ECB), which manages monetary policy with a mandate to maintain price stability primarily through interest rate adjustments.
Economic data such as GDP growth, inflation metrics (measured by the Harmonized Index of Consumer Prices, HICP), employment, manufacturing, and trade balances from major Eurozone countries—Germany, France, Italy, and Spain—are key indicators that drive EUR/USD movement. Inflation above the ECB’s 2% target generally prompts rate hikes, supporting euro strength, while weak economic performance tends to weigh it down.
About the Author
Lallalit Srijandorn is a financial analyst and digital entrepreneur based in Paris and Bangkok, specializing in forex markets and economic analysis.
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