EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias Prevails: EUR/USD hovers below the pivot point at $1.05392, with support at $1.04978.
- RSI Reflects Weak Momentum: RSI at 42 underscores limited buying interest and a risk of further declines.
- Sell Strategy: Enter short positions below $1.05384, targeting $1.04978, with a stop-loss at $1.05697.
The EUR/USD pair is trading at $1.05270, holding steady despite subdued momentum on the 4-hour chart. The pivot point at $1.05392 serves as a key level for determining near-term direction.
Immediate resistance is positioned at $1.05685, with further barriers at $1.05973 and $1.06321. On the downside, immediate support lies at $1.04978, with subsequent levels at $1.04602 and $1.04270.
Technical indicators highlight a cautious sentiment. The RSI is at 42, signaling weak momentum, while the 50 EMA at $1.05537 suggests a bearish bias as prices remain below this key moving average.
A break below $1.05384 could intensify selling pressure, exposing the pair to potential declines toward $1.04978. Conversely, a recovery above $1.05685 would shift sentiment, opening the path to test $1.05973.
For traders, the recommended strategy is to enter short positions below $1.05384, targeting $1.04978, with a stop-loss set at $1.05697. This setup aligns with the prevailing bearish trend while managing downside risk effectively.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.05384
Take Profit – 1.04978
Stop Loss – 1.05697
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$406/ -$313
Profit & Loss Per Mini Lot = +$40/ -$31
EUR/USD Price Analysis – Dec 09, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair continued its bullish momentum, remained well supported around 1.0585, reaching an intra-day high of 1.0586.
Investors are now closely watching the European Central Bank's (ECB) policy decision this Thursday, with most expecting a 25 basis point (bps) cut to the Deposit Facility Rate, bringing it down to 3%.
Many ECB officials have expressed concerns about inflation potentially falling short of the target due to a sluggish economic outlook. On the other side, the US Dollar faced pressure as market expectations rise for a rate cut by the Federal Reserve in its upcoming meeting on December 18.
Eurozone Uncertainty and ECB Rate Cut Expectations Weigh on EUR/USD Outlook
On the EUR front, markets are certain that the European Central Bank (ECB) will cut its Deposit Facility Rate by 25 basis points (bps) to 3%.
This is because many ECB officials are concerned that inflation may fall below the bank's target due to a weak economic outlook.
The ECB has already lowered the deposit rate by 75 bps this year, and Thursday’s expected rate cut would mark the third consecutive reduction.
Market participants are also worried about the Eurozone’s economic performance, especially with ongoing political uncertainty in Germany and France, the two largest economies in the region.
The situation is further complicated by concerns about the potential impact on exports, particularly with the change in leadership under US President Donald Trump. These factors are contributing to fears of a slowdown in the Eurozone economy.
Moreover, the economic outlook in France has become even more uncertain after the government was recently overthrown. Last week, Michel Barnier became the shortest-serving French prime minister after losing a no-confidence vote from both the Far Right and Left-Wing parties due to his fiscal plans.
In response, French President Emmanuel Macron announced he would find a successor for Barnier “in the coming days,” adding more instability to the country’s political landscape.
Therefore, the political and economic uncertainty in France and the Eurozone, combined with expectations of an ECB rate cut, is likely to limit the EUR/USD pair's upside.
Fed Rate Cut Expectations Weigh on USD as Investors Await US CPI Data
On the US front, the US dollar faces pressure from strong expectations that the Federal Reserve (Fed) will cut interest rates in its December 18 meeting.
The US Dollar Index (DXY), which measures the USD against six major currencies, gave up earlier gains and is struggling to hold the key 106.00 support level.
However, the CME FedWatch tool shows an 87% probability of a 25 basis point (bps) rate cut to 4.25%-4.50%, up from 62% a week ago, reflecting growing confidence in a Fed policy shift.
In the meantime, the dovish bets on the Fed increased after the November Nonfarm Payrolls (NFP) report revealed higher-than-expected job growth, adding to signs of economic resilience.
Chicago Fed President Austan Goolsbee indicated that the Fed could aim for a neutral rate of around 3% by the end of next year, aligning with projections made during the September meeting.
Looking ahead, investors are watching for the US Consumer Price Index (CPI) data for November, set to release on Wednesday. Economists expect headline inflation to rise slightly to 2.7% annually, with core inflation steady at 3.3%, which could influence the Fed’s next steps.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05475, down 0.18%, as bearish momentum tests the pair's resilience above the pivot point of $1.05327. The 50-day EMA at $1.05626 slightly hovers above the price, reflecting a short-term bearish tilt while maintaining a narrow trading range.
Immediate resistance is at $1.05973, with further barriers at $1.06321 and $1.06603, suggesting limited upward movement unless bullish momentum picks up.
On the downside, immediate support is located at $1.05071, followed by stronger levels at $1.04720 and $1.04347, which could attract renewed selling pressure if the pair breaches the $1.05327 pivot.
The RSI at 41 leans toward bearish territory, signaling the potential for further declines before oversold conditions are met.
A break above $1.05973 would reinforce bullish sentiment, targeting $1.06321. Conversely, if the pair dips below $1.05327, it could extend losses toward $1.04720.
Traders should remain cautious, with key macroeconomic data and central bank commentary likely to influence near-term volatility.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Bearish Bias: Trading below the 50 EMA ($1.05626) with RSI at 41 reflects bearish momentum.
- Support and Resistance: Immediate resistance at $1.05973; support levels to watch are $1.05071 and $1.04720.
- Trading Strategy: Buy above $1.05325 with a target of $1.05814 and a stop loss at $1.05065 to mitigate downside risk.
EUR/USD is trading at $1.05475, down 0.18%, as bearish momentum tests the pair's resilience above the pivot point of $1.05327. The 50-day EMA at $1.05626 slightly hovers above the price, reflecting a short-term bearish tilt while maintaining a narrow trading range.
Immediate resistance is at $1.05973, with further barriers at $1.06321 and $1.06603, suggesting limited upward movement unless bullish momentum picks up.
On the downside, immediate support is located at $1.05071, followed by stronger levels at $1.04720 and $1.04347, which could attract renewed selling pressure if the pair breaches the $1.05327 pivot.
The RSI at 41 leans toward bearish territory, signaling the potential for further declines before oversold conditions are met.
A break above $1.05973 would reinforce bullish sentiment, targeting $1.06321. Conversely, if the pair dips below $1.05327, it could extend losses toward $1.04720.
Traders should remain cautious, with key macroeconomic data and central bank commentary likely to influence near-term volatility. (edited)
EUR/USD - Trade Ideas
Entry Price – Buy Above 1.05325
Take Profit – 1.05814
Stop Loss – 1.05065
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$489/ -$260
Profit & Loss Per Mini Lot = +$48/ -$26
EUR/USD Price Analysis – Dec 06, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair struggled to break its downward trend, remaining under pressure around the 1.0579 level and hitting an intra-day low of 1.0566.
The recent weakness in the pair can largely be attributed to ongoing political turmoil in France, which has kept investors on edge. Additionally, cautious sentiment ahead of the upcoming US Nonfarm Payrolls (NFP) report is offering some support to the US Dollar.
The Greenback saw some selling pressure on Thursday, as a positive risk sentiment and a larger-than-expected rise in weekly Jobless Claims weighed on the USD.
This came after a string of disappointing US data, including weaker-than-expected performance in the services sector and disappointing ADP employment figures, further adding to the selling pressure on the Dollar.
As a result, the EUR/USD pair remains in a tight range, waiting for fresh catalysts to drive its next move.
Impact of US Labor Market Data and Fed's Rate Cut Speculation on EUR/USD Pair
On the US front, the broad-based US Dollar has been under some pressure as markets await the November Nonfarm Payrolls (NFP) report, with expectations for a solid increase of 200,000 jobs.
This comes after a much lower reading of 12,000 jobs in October, which was heavily impacted by hurricanes and strikes. Despite this positive outlook, some concerns remain about the strength of the labor market due to other recent data.
On the data front, the US Unemployment Rate is expected to rise slightly to 4.2% in November, up from 4.1% in October. This increase is likely to keep hopes alive for a 25 basis point interest rate cut by the Federal Reserve (Fed) in December.
In addition, data released on Thursday showed a rise in weekly Jobless Claims, which increased to 224,000 from the previous week's 215,000. This, along with a disappointing ADP employment report on Wednesday, has led to some doubts about the strength of the upcoming NFP data.
Federal Reserve Chairman Jerome Powell, however, remains cautious about cutting rates too quickly. He mentioned earlier this week that the US economy is stronger than the Fed had anticipated when it started easing rates.
Powell emphasized that any interest rate cuts will be gradual, signaling a more measured approach as the central bank assesses the economic outlook.
Therefore, the uncertainty around the US labor market and potential Fed rate cuts could weigh on the US Dollar, potentially supporting the EUR/USD pair. A weaker Dollar could boost the Euro, especially if the Nonfarm Payrolls report underperforms expectations.
Political Instability in France Weighs on Euro Recovery Prospects
On the other hand, French President Emmanuel Macron is facing growing challenges as his leadership is increasingly questioned. He is struggling to find a prime minister amid a deeply divided parliament, with far-right candidate Marine Le Pen gaining more support.
This political instability adds uncertainty to the country’s future direction. While markets have become less worried about France’s debt risk, the ongoing political tension creates a difficult environment for the Euro to recover significantly.
As a result, the overall outlook for the Euro remains cautious, and any substantial recovery seems unlikely in the near term.
EUR/USD – Technical Analysis
EUR/USD is trading at 1.05769, down 0.08%, showing mild bearish momentum as it approaches the key pivot point at 1.06053. Despite the slight decline, the pair remains supported by broader market sentiment favoring a weaker dollar amid cautious optimism surrounding global economic conditions.
On the upside, immediate resistance is seen at 1.06545, followed by 1.06927 and 1.07292, marking key levels to confirm further bullish momentum.
Conversely, support is positioned at 1.05221, with additional cushions at 1.04738 and 1.04254, where traders may look for stabilization if selling pressure intensifies.
The 50-day EMA at 1.05306 provides robust near-term support, reinforcing the broader outlook. A decisive break below 1.06053 could trigger selling pressure, targeting support at 1.05221 and lower.
However, regaining ground above the pivot point may signal a recovery, with a breakout above 1.06545 opening the path to higher resistance zones.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Critical Levels: Pivot at 1.06053; resistance at 1.06545; support at 1.05221.
- RSI at 61: Signals caution with the pair nearing overbought conditions, hinting at possible consolidation.
- Technical Setup: Below 1.06053 indicates bearish momentum; above 1.06545 confirms bullish recovery.
EUR/USD is trading at 1.05769, down 0.08%, showing mild bearish momentum as it approaches the key pivot point at 1.06053. Despite the slight decline, the pair remains supported by broader market sentiment favoring a weaker dollar amid cautious optimism surrounding global economic conditions.
The Relative Strength Index (RSI) at 61 indicates a near-overbought zone, suggesting the potential for short-term consolidation.
On the upside, immediate resistance is seen at 1.06545, followed by 1.06927 and 1.07292, marking key levels to confirm further bullish momentum.
Conversely, support is positioned at 1.05221, with additional cushions at 1.04738 and 1.04254, where traders may look for stabilization if selling pressure intensifies.
The 50-day EMA at 1.05306 provides robust near-term support, reinforcing the broader outlook. A decisive break below 1.06053 could trigger selling pressure, targeting support at 1.05221 and lower.
However, regaining ground above the pivot point may signal a recovery, with a breakout above 1.06545 opening the path to higher resistance zones.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.05909
Take Profit – 1.05238
Stop Loss – 1.06409
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$671/ -$500
Profit & Loss Per Mini Lot = +$67/ -$50
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: $1.05973, $1.06321; a break above $1.05655 signals bullish momentum.
- Support Levels: $1.04622, $1.04255; watch for a break below $1.05280 for bearish moves.
- Indicators: RSI at 49 reflects indecision; 50 EMA at $1.05290 reinforces resistance.
EUR/USD is trading at $1.05132, up 0.08%, as it consolidates above its immediate support at $1.04622. The pair remains below its pivot point of $1.05655, signaling a cautious tone amid mixed market sentiment.
Immediate resistance lies at $1.05973, with further levels at $1.06321, while on the downside, support is seen at $1.04255, followed by $1.03930.
The RSI at 49 indicates neutral momentum, suggesting that the pair lacks a clear directional bias. The 50-day EMA at $1.05290 acts as a key resistance level, aligning with the broader downward trend.
A sustained break below $1.05280 could confirm bearish momentum, targeting $1.04622 or lower. Conversely, a recovery above $1.05655 would shift the focus toward higher resistance levels.
Technical indicators suggest that traders remain cautious, with the pair trading near pivotal levels. Entry points below $1.05280 provide an opportunity for bearish plays, with a target of $1.04622 and a stop-loss at $1.05667.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.05280
Take Profit – 1.05280
Stop Loss – 1.05667
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$580/ -$387
Profit & Loss Per Mini Lot = +$58/ -$38
EUR/USD Price Analysis – Dec 04, 2024
Daily Price Outlook
During European trading on Wednesday, the EUR/USD pair is slightly down but holding steady around 1.0511. However, the currency pair is mostly moving sideways as traders await a no-confidence vote against Prime Minister Michel Barnier, led by French far-right and left-wing parties.
This vote has raised concerns about political instability in France, which could weigh on the Euro (EUR) if the government collapses.
On the other hand, the US Dollar is also seeing a slight dip, providing the EUR/USD pair with some support. However, the outlook for the Euro is uncertain, as European Central Bank (ECB) officials hint at possible interest rate cuts. Traders expect a rate cut at the ECB’s meeting on December 12.
US Economic Data and Federal Reserve Outlook Impact Dollar Strength
On the US front, investors are closely watching the upcoming economic data, including the ADP Employment Change and the ISM Services PMI for November.
Economists predict that the US private sector added 150,000 jobs in November, a significant drop from 233,000 in October.
The Services PMI, which measures activity in the services sector, is expected to decline slightly to 55.5 from 56.0, indicating slower growth in this sector.
These data points will influence expectations for the Federal Reserve's interest rate decision on December 18.
According to the CME FedWatch tool, there's a 74% chance the Fed will cut rates by 25 basis points, bringing them to 4.25%-4.50%, and a 26% chance that rates will remain unchanged.
Investors will also be paying attention to the Fed’s Beige Book and comments from Chairman Jerome Powell for more clues on future rate actions.
Meanwhile, the US Dollar is showing a muted trend ahead of the economic releases. The US Dollar Index (DXY), which tracks the value of the US Dollar against six major currencies, is fluctuating around 106.30.
The outlook for the Dollar remains generally positive, especially after US President-elect Donald Trump threatened to impose 100% tariffs on BRICS countries, a move that could further strengthen the Dollar's dominance.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05132, up 0.08%, as it consolidates above its immediate support at $1.04622. The pair remains below its pivot point of $1.05655, signaling a cautious tone amid mixed market sentiment.
Immediate resistance lies at $1.05973, with further levels at $1.06321, while on the downside, support is seen at $1.04255, followed by $1.03930.
The RSI at 49 indicates neutral momentum, suggesting that the pair lacks a clear directional bias. The 50-day EMA at $1.05290 acts as a key resistance level, aligning with the broader downward trend.
A sustained break below $1.05280 could confirm bearish momentum, targeting $1.04622 or lower. Conversely, a recovery above $1.05655 would shift the focus toward higher resistance levels.
Technical indicators suggest that traders remain cautious, with the pair trading near pivotal levels. Entry points below $1.05280 provide an opportunity for bearish plays, with a target of $1.04622 and a stop-loss at $1.05667.
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EUR/USD Price Analysis – Dec 02, 2024
Daily Price Outlook
The EUR/USD pair is facing some selling pressure, dropping to around 1.0514 and hitting an intra-day low of 1.0496, as the US dollar strengthens during the early hours of European trading on Monday.
Investors will be watching closely for European Central Bank President Christine Lagarde's speech and the release of the US ISM Manufacturing Purchasing Managers' Index (PMI) later today.
Although the losses in the EUR/USD pair could be short-lived, the rise in inflation in the Eurozone above the European Central Bank's target is putting increasing pressure on the ECB to tighten its monetary policy. This could strengthen the Euro against the US Dollar, potentially pushing the EUR/USD pair higher as markets react to the inflation data.
Impact of ECB's Rate Cut Expectations and Weak Growth Outlook on the EUR/USD Pair
On the EUR front, inflation in the Eurozone, measured by the Harmonized Index of Consumer Prices (HICP), rose to 2.3% year-on-year (YoY) in November, up from 2.0% in October.
This increase met market expectations but went beyond the European Central Bank's (ECB) target of 2.0%.
Meanwhile, the Core HICP, which excludes volatile items like food and energy, climbed by 2.8% YoY in November, slightly higher than the previous reading of 2.7%, also in line with expectations.
Despite this rise in inflation, the market has already priced in a 25 basis point (bps) rate cut from the ECB in December, which would mark the bank's fourth rate reduction this year.
However, expectations for a larger 50 bps cut have been fading. This change in outlook is due to some improvement in the Eurozone's growth forecast, although it remains weak.
As a result, the market's reduced expectations for aggressive rate cuts are limiting any significant movement in the Euro.
The ECB's expected rate cut is still putting pressure on the Euro, as it signals the bank's ongoing efforts to support the struggling economy.
As a result, the Euro has faced some selling pressure, which could continue in the near term as market participants adjust to the ECB's policies and the overall economic outlook.
Therefore, the ECB's expected rate cut and weaker growth outlook are putting pressure on the Euro, likely leading to further selling of EUR.
This could result in continued downward movement for the EUR/USD pair as investors adjust to the ECB's policies.
Impact of the Fed's Cautious Approach on the US Dollar and EUR/USD Pair
On the US front, the Federal Reserve (Fed) is taking a cautious approach, which is likely to support the strength of the US Dollar.
Fed Chair Jerome Powell recently stated that the economy isn’t showing signs that would require a quick decision to lower interest rates.
He also mentioned that the current economic strength gives the Fed the flexibility to make decisions carefully.
As a result, the Fed is not rushing into rate cuts, which helps maintain investor confidence in the US Dollar. Powell's comments suggest the central bank will continue to closely monitor economic data before making any drastic changes.
This cautious stance provides stability to the US Dollar, as investors are less concerned about major rate cuts in the near future.
Market expectations indicate a nearly 65.4% chance that the Fed will reduce rates by a quarter point in December, according to the CME FedWatch Tool.
However, with the economy showing resilience, the Fed’s more measured approach means the US Dollar could remain supported, limiting any sharp decline. As a result, the US Dollar’s strength may continue to weigh on the EUR/USD pair.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.05217, down 0.50%, reflecting sustained bearish momentum. The currency pair remains below its critical pivot point at $1.05657, signaling continued downside pressure.
Immediate resistance is seen at $1.05973, with further hurdles at $1.06321. These levels are pivotal, as a breakout above $1.05973 could signal a reversal of the bearish trend. However, the 50-day EMA at $1.05339 reinforces near-term resistance, limiting upward potential.
On the downside, immediate support rests at $1.04983, followed by deeper levels at $1.04690 and $1.04332. The RSI at 40 indicates bearish sentiment, though it is not yet in oversold territory, leaving room for further declines.
A sustained break below $1.04983 could accelerate selling pressure, targeting the $1.04690 support level, while failure to breach resistance suggests continued consolidation within the current range.
The broader technical outlook remains bearish as long as EUR/USD trades below $1.05657. Traders should monitor key support levels to gauge the extent of downside risk.
A decisive move above the pivot point could shift sentiment and attract bullish interest, but caution is warranted given the current downward trend.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Resistance Levels: $1.05657 (pivot), $1.05973, $1.06321.
- Support Levels: $1.04983, $1.04690, $1.04332.
- Momentum: RSI at 40 signals bearish momentum; the 50-day EMA at $1.05339 adds to overhead resistance.
The EUR/USD pair is trading at $1.05217, down 0.50%, reflecting sustained bearish momentum. The currency pair remains below its critical pivot point at $1.05657, signaling continued downside pressure.
Immediate resistance is seen at $1.05973, with further hurdles at $1.06321. These levels are pivotal, as a breakout above $1.05973 could signal a reversal of the bearish trend. However, the 50-day EMA at $1.05339 reinforces near-term resistance, limiting upward potential.
On the downside, immediate support rests at $1.04983, followed by deeper levels at $1.04690 and $1.04332. The RSI at 40 indicates bearish sentiment, though it is not yet in oversold territory, leaving room for further declines.
A sustained break below $1.04983 could accelerate selling pressure, targeting the $1.04690 support level, while failure to breach resistance suggests continued consolidation within the current range.
The broader technical outlook remains bearish as long as EUR/USD trades below $1.05657. Traders should monitor key support levels to gauge the extent of downside risk.
A decisive move above the pivot point could shift sentiment and attract bullish interest, but caution is warranted given the current downward trend.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.05297
Take Profit – 1.04988
Stop Loss – 1.05530
Risk to Reward – 1: 1.3
Profit & Loss Per Standard Lot = +$309/ -$233
Profit & Loss Per Mini Lot = +$30/ -$23
EUR/USD Price Analysis – Nov 29, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair has been facing selling pressure after reaching a fresh weekly high near 1.0580.
This upward momentum faded as the flash Eurozone Harmonized Index of Consumer Prices (HICP) for November showed a month-on-month decline in price pressures, which weighed on the Euro.
At the same time, the US dollar saw a rebound, which pushed the pair back below 1.0600, with the USD regaining some strength in a shortened holiday week.
EUR/USD Faces Pressure as Weak Economic Data Fuels ECB Rate Cut Expectations
On the data front, the flash Eurozone Harmonized Index of Consumer Prices (HICP) data for November showed a drop in price pressures. The monthly headline HICP decreased by 0.3%, while core HICP, which excludes food and energy prices, fell by 0.6%.
This weak data sparked expectations that the European Central Bank (ECB) might cut interest rates by 50 basis points in its December meeting. So far, the ECB has already lowered its Deposit Facility Rate by 75 basis points this year, to 3.25%.
Apart from this, the weak German Retail Sales data for October showed a larger-than-expected decline of 1.5%, after a 1.2% increase in September. Economists had predicted a smaller drop of 0.3%.
On a year-on-year basis, Retail Sales grew by just 1%, far below the expected 3.2% and slower than the previous month's 3.8%. These figures raised concerns about consumer spending and added to the speculation of a potential ECB rate cut.
Meanwhile, ECB officials, like François Villeroy de Galhau, have hinted at the possibility of a large interest rate cut. In his speech on Thursday, he mentioned that the ECB might reduce rates in December, depending on economic data and risks.
Traders are currently expecting the ECB to cut rates by at least 25 basis points in December, and further cuts are anticipated through 2025, pushing the Deposit Facility Rate down to 1.75% by the end of next year.
US Dollar Rebounds as Markets Anticipate Economic and Monetary Policy Shifts
On the US front, the US Dollar rebounded in a holiday-shortened week and the US Dollar Index (DXY), which tracks the USD against six major currencies, recovered from early losses, rising to around 106.00 after dipping to a two-week low of 105.60 on Friday.
However, the rebound began on Monday after US President-elect Donald Trump nominated Scott Bessent, a veteran hedge fund manager, as Treasury Secretary.
Markets expected Bessent to carry out Trump’s economic plans without affecting foreign relations or fiscal policy. In an interview with the Financial Times, Bessent explained that he plans to slowly introduce tariffs and reduce the budget deficit by cutting spending, without causing a big rise in inflation.
On the monetary policy front, experts believe the Federal Reserve (Fed) will be cautious about cutting interest rates, as the core Personal Consumption Expenditures Price Index (PCE) showed increased inflation in October. However, the likelihood of a 25 basis point rate cut in December stands at 66%, with the rest expecting no change.
Therefore, the rebound of the US dollar, driven by expectations of fiscal policy changes and cautious Fed rate cuts, strengthened the USD, putting downward pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.05697, up 0.17% for the session, as the pair shows signs of sustained bullish momentum above the $1.05590 pivot point. Immediate resistance is positioned at $1.06071, aligning with the next key target of $1.06457.
A breakout above these levels could drive further gains toward $1.06811, signaling continued optimism in the euro.
On the downside, immediate support rests at $1.05269, followed by $1.04983 and $1.04597, with the 50-day EMA at $1.05161 providing dynamic support to the pair. A breach below these levels could shift the sentiment bearish, with increased selling pressure likely if $1.04983 fails to hold.
The RSI stands at 61, indicating moderate bullish momentum without nearing overbought territory, which leaves room for additional upside. The price action suggests a favorable outlook for buyers if the pair sustains its position above $1.05590.
Traders may look to enter long positions above $1.05583, targeting $1.06070, while maintaining a stop-loss at $1.05210 for prudent risk management.
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