EURUSD Digs Deep as Markets Anticipate Fresh Volatility

The Euro has continued to weaken against the US dollar as markets look to pick up momentum following a quiet start to the week, with US trading activity subdued due to the Presidents' Day holiday. At the time of writing, EURUSD has slipped approximately 0.16% during the London session, with the price now trading below the 1.1850 handle.

• EURUSD trades below 1.1850 as volatility returns to the market
• Focus shifts to Fed minutes and unemployment claims data
• Key support levels seen at 1.1823 and 1.1810

On the fundamental front, rate cut sentiment continues to dominate the headlines after the latest US CPI report came in below expectations — reinforcing the view that the Federal Reserve could consider adjusting its monetary policy stance in the near term.

The coming days bring a significant slate of data releases that are likely to stoke fresh market volatility. The Fed minutes, due Wednesday, will reaffirm the central bank's position on its monetary policy path, offer further interpretation of current inflation trends, and potentially provide clues on the timing of any rate adjustment. That will be followed closely by the weekly unemployment claims figures, which are expected to improve on the previous reading and shed further light on the health of the US labour market.

Technical Outlook

EURUSD continues to attract sellers after rejecting a key level around 1.1200, though the pair still maintains a broader bullish structure on the higher timeframes. Following a period of consolidation on Monday, price has edged lower and is now eyeing a potential move toward the 1.1810 region.

A near-term support level around 1.1823 could provide a temporary lifeline against further decline, but buyers will need to remain cautious of a descending trendline that has been exerting sustained downward pressure since the previous week. Failure to break above this trendline keeps the door open for a revisit of the 1.1823 support — and should that level give way, the next area of interest comes in at 1.1810.

On the upside, a clean break above the descending trendline would shift the near-term bias back in favour of buyers, with resistance levels to watch at 1.1870 and 1.1887.

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