EUR/USD Slips From Four‑Year High as Fed Focus Returns; Short Bias Below 1.1980
EUR/USD heats up: why the euro is giving back gains
EUR/USD retreated to about 1.1985 on 28 January 2026 after trading as high as 1.2082 earlier in the week. The move reflects fading impact from earlier dollar-related political commentary and renewed focus on US monetary policy, while rising market odds that the European Central Bank may pivot toward easing are weighing on the euro. Short-term technicals are mixed — the 4‑hour MACD shows momentum, but the RSI sits above 70, signalling limited upside.
Market snapshot and key levels
Price: ~1.1985
Immediate support: 1.1980 (key short-term trigger), then January 26 intraday low 1.1907.
Immediate resistance: 1.2082 (four‑year high), upside extension 1.2165.
Primary drivers
Fed vs ECB narrative
Market attention has swung back toward the Federal Reserve. Any hawkish comments or stronger-than-expected US data could drive renewed dollar strength and push EUR/USD below near-term support. At the same time, growing odds of ECB easing reduce euro demand on carry and positioning.
Positioning and technical signals
The pair’s short-term technicals show mixed signals: the 4‑hour MACD is trending higher (momentum bias), but the 4‑hour RSI above 70 suggests overbought conditions and limited room for further upside without a corrective pullback. That combination often precedes range failure to the downside when macro risks (Fed hawkishness, ECB easing probabilities) align with the technical picture.
Practical trading ideas (short‑term)
1) Short on confirmed break below 1.1980: target 1.1907 with a stop above 1.2082. This trade aligns macro risk (Fed/dollar strength) with a technical breakdown of immediate support.
2) Fade rallies into 1.2082–1.2165: treat rallies toward prior highs as selling opportunities while RSI remains extended; use tight stops above resistance to limit tail risk.
3) If price flips and sustains above the 1.2082 zone with accompanying bullish macro news, reassess bias — a sustained break would open the 1.2165 level and reduce the short bias.
Risk management and catalysts to watch
Key risk events include Fed speaker commentary, US macro prints (employment and inflation data), and any ECB communication that shifts easing odds. Watch liquidity in Asian and US sessions — major data releases can spike EUR/USD beyond technical levels. Given the proximity to the support zone, use disciplined position sizing (e.g., risk per trade at a predetermined percentage of capital) and avoid oversized exposure into major macro events.
How automated tools can help
Execution speed and consistent risk application matter when trading short-term forex setups. Retail traders who want to automate entries, stops and position sizing can evaluate a Forex Trading Bot or the Trade Assistant Bot to maintain discipline across sessions. Automated trading reduces missed entry opportunities and enforces stop-loss discipline during volatile Fed-driven moves.
Bottom line
EUR/USD’s retreat from 1.2082 to ~1.1985 reflects a renewed USD focus tied to the Fed and rising ECB easing odds. For short-term traders the immediate pivot is 1.1980 — a confirmed break opens a move to 1.1907, while rallies into the 1.2082–1.2165 zone are attractive fade opportunities provided macro risks remain euro‑negative.
Next steps for traders
Set alerts at 1.1980 and monitor Fed/ECB communications. If you prefer systematic execution, consider testing automated trading solutions to backtest this setup and execute predefined rules. PlayOnBit offers options for both forex and crypto traders — from the Forex Trading Bot to multi-market assistants that support diversified strategies (crypto trading and forex trading).
Conclusion and call to action
If you trade short-term forex or want to apply consistent risk management to setups like EUR/USD under 1.1980, consider automating execution with an AI trading bot. Automating entries, stops and position-sizing helps enforce discipline during fast moves and frees you to monitor macro drivers and higher‑level strategy.
Try a demo or live deployment today at PlayOnBit or explore the Trade Assistant Bot to see how automated trading and AI-driven execution can help implement the EUR/USD setups discussed above.