EUR/USD struggles under the weight of the Greenback

• EUR/USD slumped back into the 1.0400 handle on Thursday.
• German data looms ahead on Friday, followed by key US inflation figures.
• Fiber traders wait to see if the Fed's rate call this week was the right one.

EUR/USD shifted lower for a fourth consecutive trading day on Thursday, peaking near 1.0450 before softening to shed one-fifth of one percent on the day and ending just below the 1.0400 handle as the Euro's near-term bull run draws to an end. A slate of German economic figures are due early Friday, followed by a key US inflation reading.

European Central Bank (ECB) President Christine Lagarde hit newswires during Thursday's early US market session to soothe markets over the recent soft patch of European data, noting that a single month or quarter of souring data doesn't necessarily mean a trend is being established. The ECB head may come to regret those remarks with German Retail Sales figures and Consumer Price Index (CPI) figures in the barrel for early Friday.

German Retail Sales are expected to hold steady at 2.5% YoY for the annualized period ending in December, while the MoM figure is expected to barely recover ground to 0.2% after November's downside print of -0.6%. Headline German CPI inflation is likewise expected to hold steady at 2.6% for the year ended in December, holding frustratingly above the typical central bank targets of 2%.

US economic data was mixed on Thursday, leaving markets further confused. US Gross Domestic Product (GDP) growth for the fourth quarter of 2024 came in lower than expected, while weekly Initial Jobless Claims figures exceeded expectations and remained well within recent norms.

On Friday, US Personal Consumption Expenditure Price Index (PCEPI) inflation metrics will be released during the US market session. As the Federal Reserve's (Fed) preferred method for measuring and tracking consumer-level inflation, this PCEPI report is likely to attract more attention than usual after the Fed boldly maintained interest rates earlier this week, despite President Trump's strong objections.

EUR/USD price forecast

EUR/USD's soft stance on Thursday marked another bearish rejection of the 50-day Exponential Moving Average (EMA) near 1.0450. The Fiber has soured for four consecutive sessions, leaving the pair on the low end of key technical levels as the latest bullish recover sputters.

The pair is still holding on the high side of the last major swing low into two-year bottoms south of 1.0200 reached earlier in the month. However, bulls are poised to fully run out of gas and drag the pair back into the 1.0300 region.

EUR/USD daily chart