EUR/USD Strategy - Eurozone Political and Economic Uncertainty Weighs, EUR/USD Shows a Bearish Bias

Fundamental Analysis:

Recently, the preliminary December Manufacturing PMI figures for Germany, France, and the Eurozone were released. While the Eurozone PMI remained unchanged at 45.2, the Manufacturing PMIs for France and Germany declined compared to previous values. This has strengthened the market's belief that last week's European Central Bank (ECB) rate cut was necessary, which is unfavorable for the euro. Additionally, the ECB's decision to lower next year's Eurozone GDP growth forecast by 0.2% reflects its pessimistic outlook on the economy. Coupled with the French government budget impasse and Germany's decision to hold early elections in February next year, the already weak economic environment is further plagued by political uncertainty, pushing EUR/USD into a bearish trend.

Technical Analysis:

On the 1-hour chart, EUR/USD has rebounded from its lows, forming a temporary golden cross on the moving averages. However, the overall downtrend structure remains intact, with the KD indicator resuming its downward movement. For those not holding positions, it is recommended to enter short positions near short-term resistance. For more aggressive traders, short positions can target the lowest level on the chart directly.

Trading Recommendations:

Sell EUR/USD on a rebound to 1.0520.

First target: 1.0479 Second target: 1.0452 Stop loss: 1.0552

Support: 1.0479 Resistance: 1.0550

Disclaimer: The above content is for reference only and does not represent the platform's stance. Stick to your own trading strategy and implement proper risk management.