EUR/USD traded within a tight range Thursday, failing to sustain an early rally after the ECB cut rates by 25bps and hinted at further easing. The euro initially rose to 1.0468 following softer U.S. Q4 GDP and jobless claims data, which weighed on Treasury yields. However, as U.S. yields rebounded and German-U.S. spreads widened, sellers emerged, driving EUR/USD back toward its session lows near 1.0410. Markets remain cautious ahead of key economic data and potential U.S. tariffs, both of which could dictate the pair’s next directional move.

From a technical standpoint, EUR/USD remains bearish despite short-term rebounds. The presence of daily and monthly doji candles indicates uncertainty, but the broader downtrend since September remains intact. Key resistance is found at 1.0468 and 1.0500, while immediate support sits at 1.0390, followed by 1.0350. A break below these levels could open the door for further losses, potentially driving EUR/USD toward parity if trade tensions escalate and ECB easing expectations increase.

Market participants are now focused on U.S. inflation data and trade policy risks. The Fed’s favored PCE index will be closely monitored for signs of persistent inflation, which could reinforce a stronger dollar. Meanwhile, traders await clarity on U.S. tariffs, with a potential announcement from President Trump on February 1. Should tariffs be imposed on European goods, the dollar’s yield advantage over the euro could widen further, increasing downside pressure on EUR/USD. Until then, the pair is likely to remain range-bound, with volatility driven by shifting risk sentiment.