- The EUR/USD outlook reflects range-bound momentum, backed by a resilient euro but limited by USD strength.
- The ECB navigates a divided stance among policymakers about the timing of easing, as sticky inflation limits the chances of early rate cuts.
- Traders look ahead to the US manufacturing PMI and manufacturing prices for directional bias.
The EUR/USD outlook shows the pair edged lower, trading near 1.1500 amid a stronger greenback and a cautious market sentiment. The latest Eurozone manufacturing PMI stabilized around 50, halting the current contraction. This development cautioned the investors as France and the Netherlands grappled with fiscal and political uncertainty, weighing the euro.
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Regardless, the ECB witnesses a divided stance among policymakers regarding future policy adjustments. As noted by dovish policymakers, growth could decline, potentially extending the below-target inflation trend.
However, the ECB plans to achieve 1.7% price growth by 2026 and 1.9% by 2027, aiming to improve stability gradually. However, the recent data revealed core and service inflation at higher levels than expected. This data limits the central bank from considering early rate cuts.
On the other hand, the dollar witnessed a boost from the US as expectations of a December rate cut dampened further. The USD dollar index rose near 100.00, backed by tightening financial conditions and the Fed’s hawkish remarks. The Fed’s strong rhetoric suggested a potential greenback strength in the near-term. According to Commerzbank analysts, the dollar strength is also partially due to the data blackout.
EUR/USD Daily Key Events
The major events in the day include:
- US ISM Manufacturing PMI
- US ISM Manufacturing Prices
On Monday, traders await the ISM manufacturing PMI and ISM manufacturing prices to gain insights into economic conditions.
EUR/USD Technical Outlook: Bears to Pounce 1.1500
The EUR/USD 4-hour chart shows the pair trading towards the downside near 1.1511. The price remains below all key MAs. The 200-MA near 1.1670 signals the bearish bias, acting as a major resistance level.
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The RSI is near 30, holding around the oversold region, suggesting a potential short-term rebound but not confirming a trend reversal. Persistently staying below the 1.1555 level could trigger further downside towards 1.1500 and 1.1475. Conversely, a decisive break above 1.1610 could allow a trend reversal towards 1.1670 and 1.1700.
Support Level
Resistance Level
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