- The EUR/USD forecast indicates slight selling pressure amid reduced expectations for a December Fed cut.
- Despite disruptions from Trump’s tariff policies, the euro’s slow but steady growth fails to lift the euro.
- Traders await EU economic forecasts, the Empire State Manufacturing Index, and commentary from FOMC officials for further impetus.
The EUR/USD pair shows a mild bearish bias, as it trades near 1.1605 after extending its losses for the second successive session on Monday amid a steady US dollar. Last week, the US government shutdown ended, increasing market optimism and lifting the dollar.
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Markets are keenly awaiting the delayed key data releases, especially Thursday’s non-farm payroll, cautioning investors. This move boosts the dollar, pressuring the euro. Markets are pricing in a 46% probability of a December rate, down from last week’s 67%.
Meanwhile, the euro experienced a modest and subdued momentum as caution prevailed in the market ahead of US data. According to Bloomberg, ECB Governing Council member Olli Rehn emphasized on Saturday that the slowing inflation risks should not be overlooked, even though the upside risks remain.
Additionally, he stated that the EU economy remains resilient despite disruptions from Trump’s tariff policies, maintaining a slow but steady growth in the euro. He suggested that there is a need for strong bank buffers and a vigilant policy stance. These moves weighed on the euro, pushing it lower in a defensive market.
EUR/USD Daily Key Events
The significant events in the day include:
- EU Economic Forecasts
- Empire State Manufacturing Index
- FOMC Member Williams Speaks
- FOMC Member Jefferson Speaks
- Construction Spending m/m
On Monday, traders will look ahead to EU economic forecasts, the Empire State Manufacturing Index, and speeches by FOMC members Williams and Jefferson for further insights into the inflation outlook and potential policy cues.
EUR/USD Technical Forecast: Consolidates Below 200-MA
The EUR/USD 4-hour chart shows a consolidation as it trades near 1.1605 after its recent pullback from 1.1650. The price remains above the key 50- and 100-period MAs, suggesting a short-term upside. However, the 200-period MA acts as a dynamic resistance zone as the pair fails to sustain near the 1.1640 and 1.1655 levels, limiting upside potential.
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The RSI holds near mid-50, suggesting a cooling momentum. There are no signs of an apparent trend reversal yet. If buyers gain traction above the 200-MA, the upside leg could extend to 1.1700. Conversely, if the pair breaks below 1.1600, a deeper correction could aim for 5the 0-MA.
Support Levels:
Resistance Levels
- 1.1650
- 1.1670
- 1.1720
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