EURUSD at resistance: Wedge pattern indicates potential reversal

The EURUSD pair has entered a correction phase after a sharp rally, as strong US macroeconomic data strengthened the US dollar, with the rate currently at 1.1746. Discover more in our analysis for 23 January 2026.

EURUSD forecast: key takeaways

• US consumer spending rose by 0.5% in November after a similar increase the previous month
• US initial jobless claims increased by 1 thousand to 200 thousand for the week
• Strong consumer spending and labour market data continue to support the US dollar
• EURUSD forecast for 23 January 2026: 1.1645

Fundamental analysis

The EURUSD pair is undergoing a correction after aggressive growth in the previous session. Buyers are attempting to consolidate above the 1.1785 resistance level, but momentum is weakening amid strong US macroeconomic data.

Recent data on consumer spending inflation, which remains the Federal Reserve’s preferred inflation gauge, pointed to resilient domestic demand. US consumer spending rose by 0.5% in November after a similar increase a month earlier, fully in line with analysts’ expectations. Growth in spending, which accounts for more than two-thirds of economic activity, increases the likelihood of a third consecutive quarter of solid economic growth.

The labour market also continues to show resilience. Initial jobless claims rose by just 1 thousand to 200 thousand for the week. The figure remained well below market expectations of 212 thousand and confirmed continued tightness in the labour market.

Against this backdrop, strong consumer spending and labour market data support the US dollar and limit further upside in EURUSD, making today’s outlook bearish.

Technical outlook

EURUSD quotes are correcting after rebounding from a resistance level. The market retains the potential to form a Wedge reversal pattern, indicating a high probability of a reversal.

The EURUSD forecast for today suggests a decline towards the 1.1645 level as the reversal pattern plays out. The current technical picture signals growing selling pressure. The Stochastic Oscillator further confirms the bearish scenario. Its signal lines approached overbought territory and formed a bearish crossover, increasing the likelihood of a corrective decline.

A key condition for the development of bearish momentum will be consolidation below the 1.1715 level. Such a signal would indicate a breakout below the lower boundary of the Wedge pattern and significantly increase the probability of reaching the 1.1645 target.

EURUSD overview

• Asset: EURUSD
• Timeframe: H4 (Intraday)
• Trend: moderately bullish with risks of a correction
• Key resistance levels: 1.1760 and 1.1815
• Key support levels: 1.1690 and 1.1585

EURUSD trading scenarios for today

Main scenario (Sell Stop)

Consolidation below the 1.1705 level will confirm the implementation of the Wedge reversal pattern and point to the formation of a sustained bearish momentum. A breakout below the pattern’s lower boundary will signal a downward move after the previous day’s sharp rally.

The risk-to-reward ratio is 1:2. Potential profit at the take-profit level is around 60 pips, while potential losses are limited to 30 pips.

• Take Profit: 1.1645
• Stop Loss: 1.1735

Alternative scenario (Buy Stop)

Strong growth and consolidation above 1.1775 would signal a weakening of the bearish momentum and indicate a corrective pullback after the sharp rally.

• Take Profit: 1.1905
• Stop Loss: 1.1725

Risk factors

Attempts by buyers to consolidate above the 1.1785 resistance level could halt the bearish momentum. Strong US macroeconomic data, despite supporting the dollar, create uncertainty for further downside, as any additional positive economic surprises could revive EURUSD growth.

Summary

Strong consumer spending and labour market data continue to support the US dollar, limiting further upside potential for the currency pair. EURUSD technical analysis indicates that consolidation below the 1.1715 level would confirm the reversal scenario and open the way for a decline towards 1.1645.

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