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EURUSD had a volatile trading day on Friday. Initially, reports that the US killed top Iranian military general Soleimani push the currency pair to an intraday low of 1.1124. However, EURUSD recovered most of its losses by the European session. By the end of the day, the currency pair had settled at 1.1156, incurring a 14-pip loss. Risk Aversion Weighed Down the Euro The biggest news on Friday and over the weekend was on the US killing General Soleimani. He was a crucial military figure in the Middle East who is credited for fighting against ISIS in the region and masterminding the war in Syria. He had been targeted by the US after apparently allowing protesters to attack the US embassy in Baghdad. Iran had warned against retaliations and this geopolitical crisis has sparked a wave of risk aversion in the markets. Safe haven assets like the dollar were then heavily-sought. FOMC Meeting Minutes Helped EURUSD Bounce Back However, losses on the euro were limited by the dovish FOMC meeting. According the report on the recent monetary policy meeting, officials see rates to remain steady until 2020. While they expressed their optimism on the resilience of the economy, Fed officials seemed worried that inflation in the country seemed too low. They also acknowledged the risks to the US economy by the slowdown in global growth. PMI Reports Due from the Euro Zone Today Today, a roster of reports from the euro zone are due to be released. At 7:00 am GMT, the German retail sales report for November is eyed to print at 1.1%. Then at 8:15 am GMT, the Spanish services PMI for December is expected at 53.9. The French final services PMI will then be released at 8:50 am GMT with a 52.4 forecast. Meanwhile, the German final services PMI is estimated at 52.0. The overall euro zone final services PMI is seen to have remained steady at 52.4. It is scheduled at 9:00 am GMT. The Sentix Investor Confidence report is also due at 9:30 am GMT with a 3.0 forecast. If there are no updates in the US-Iran conflict, risk aversion could die down in today's trading and better-than-expected figures could allow EURUSD to trade higher. On the other hand, a surge of risk aversion or disappointing euro zone data may only weigh it down. Read our Best Trading Ideas for 2020. EURUSD Outlook On the hourly time frame, we can see that EURUSD has pulled back some of its gains to the 61.8% Fib level (when you draw the Fibonacci retracement tool from the low of December 24 and the high of December 31). A closer look would also reveal what looks like an inverse head and shoulders chart pattern. This is evidenced by the initial lower lows that the market formed which was then followed by a higher low. In forex trading, this chart pattern is widely considered as a bullish signal. The market’s lack of consistency in making lower lows is taken as a sign that momentum has shifted into the buyers’ side. A bullish close above the neckline resistance around 1.1170 would be needed for the chart pattern to be complete. It could also mean that EURUSD may be headed to its December highs around 1.1237. On the other hand, a bearish candlestick around 1.1170 could mean that there are still enough sellers in the market to possibly push EURUSD lower. A drop below Friday’s low at 1.1124 will invalidate the chart pattern altogether. This could mean that the currency pair is headed to its December 24 lows at 1.1070.