Insights 
VT 
Key Points
- EURUSD traded flat at 1.1685 after a 0.3% rebound from 1.16697
- Price remains capped below 1.1700 as short-term momentum weakens
EURUSD held steady at 1.1685 on Thursday after rebounding 0.3% in the prior session. The pair had slipped earlier to 1.16697, tracking a wave of US dollar volatility triggered by geopolitical headlines out of Washington.
That pressure eased after President Donald Trump withdrew his threat to impose tariffs on several European NATO members.
The proposed tariffs were due to take effect on February 1 and would have targeted Denmark, Sweden, France, Germany, the Netherlands and Finland, alongside Britain and Norway.
Trump later said he had reached a framework for a deal with NATO regarding Greenland and ruled out military action, prompting a sharp reduction in defensive positioning.
The initial tariff threat had pushed EURUSD lower from a recent high of 1.17430, as traders moved quickly to price in political risk. Once that risk receded, the euro stabilised, though upside momentum failed to rebuild with conviction.
A cautious outlook remains appropriate. Without fresh eurozone catalysts, EURUSD is likely to trade reactively, with political headlines and broader dollar sentiment continuing to dictate direction.
Technical Analysis
EURUSD is trading at 1.16850, marginally lower by 0.02%, as bearish momentum persists following a failed breakout at 1.17430.
Since that peak, the pair has been on a steady downtrend, forming lower highs and lower lows, with the latest bounce from 1.16697 showing only minor recovery attempts.
The price remains below all key moving averages (MA5 to MA30), reinforcing a short-term bearish structure.
Volume has tapered off during the decline but saw a modest pickup near the recent bottom, suggesting some bottom-fishing interest.
However, for bulls to regain control, the pair would need to break above the 1.1706–1.1720 resistance zone. Until then, the risk remains tilted to the downside, especially if upcoming macro data leans hawkish for the USD.
Short-term Outlook for EURUSD
EURUSD remains caught between fading geopolitical risk and a lack of strong eurozone drivers. Support at 1.16697 continues to anchor the downside, while resistance near 1.1700 limits recovery attempts.
If US political rhetoric remains muted, the pair may continue to grind sideways, with intraday moves driven by positioning rather than fundamentals.
A break below 1.16697 would expose deeper retracement levels, while a clear hold above 1.1700 would be needed to restore short-term upside confidence.
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