EUR/USD Corrective Trend: Key ECB Signals and Fed Outlook

The euro area consumer and business confidence index came in at 97.0 points, slightly above 96.8 points a month earlier, while the business climate assessment was revised down from –0.47 to –0.66 points. In November, the consumer confidence indicator remained at –14.2 points, while expected consumer inflation rose from 21.9 to 23.1 points, returning to the positive trajectory seen since July 2023. The services confidence index adjusted from 4.2 to 5.7 points, and sentiment in the manufacturing sector improved from –8.5 to –9.3 points, above the yearly low of –14.1 points recorded in January. At its 30 October meeting, the Governing Council of the European Central Bank (ECB) paused changes to monetary conditions, judging them sufficiently tight to withstand potential external and internal shocks. However, some officials noted that the “dovish” phase may be considered over, as inflation has approached the medium-term target of 2.0%. Even so, risks related to external instability, trade policy and uncertainty in financial markets remain, and traders currently price the probability of a rate adjustment in 2026 at around 30.0%.

The US dollar is holding near 99.30 in the USDX. Today at 16:45 (GMT+2), business activity data in the manufacturing sector will be released: in November, the S&P Global index is expected to decline from 52.5 to 51.9 points, while the Institute for Supply Management (ISM) index is forecast to rise from 48.7 to 49.0 points. Meanwhile, according to the CME FedWatch Tool, the probability of monetary policy easing by the US Federal Reserve in December has reached 87.4%.

Support and resistance levels

On the daily chart, the trading instrument is approaching the recently formed resistance line of the descending channel at 1.1700–1.1400.

Technical indicators are maintaining an unstable sell signal: the fast EMAs of the Alligator indicator are located just below the signal line, narrowing the fluctuation range, while the AO histogram is forming corrective bars, edging higher in the negative zone.

Resistance levels: 1.1660, 1.1830.

Support levels: 1.1510, 1.1290.

Trading scenarios and EUR/USD outlook

Long positions may be opened after a rise and consolidation of the price above 1.1660 with a target around 1.1830. Stop loss — at 1.1600. Implementation period: 7 days and more.

Short positions may be opened after a decline and consolidation of the price below 1.1510 with a target at 1.1290. Stop loss — around 1.1580.