EUR/USD Rises Toward 1.1650 as Markets Brace for Fed Rate Cut Signal

Meanwhile, eurozone macroeconomic data released yesterday was mixed: core inflation for November came in at 2.4% YoY versus the 2.5% forecast, and fell by 0.5% MoM after rising 0.3% a month earlier. The broader consumer price index accelerated from 2.1% to 2.2% YoY but declined from 0.2% to –0.3% MoM. In addition, the unemployment rate for October remained unchanged at 6.4%, whereas analysts expected a drop to 6.3%. Today at 11:00 (GMT+2), investors and forex traders will evaluate service-sector PMI data from S&P Global and Hamburg Commercial Bank (HCOB) for November, followed at 12:00 (GMT+2) by producer price dynamics for October.

Overall, the inflation situation in the EU appears manageable: at this stage the European Central Bank (ECB) is unlikely to act pre-emptively. Meanwhile, the labor market continues to show weakness amid declining business activity. The ECB maintains confidence in its current monetary stance following comments by President Christine Lagarde, who highlighted that borrowing costs are at appropriate levels. The regulator sees a continued easing of inflationary pressures but warns that new price spikes are possible due to US trade tariffs and disruptions in global supply chains. Lagarde also pointed to stronger-than-expected economic growth in the region and does not rule out an acceleration of GDP in 2025 despite structural problems in Germany and fiscal risks in France. Most experts do not anticipate a rate change in December, although the quarterly forecast may be adjusted if inflation diverges from the 2.0% target.

Support and Resistance Levels

Bollinger Bands on the daily chart show a largely sideways trend: the price range remains almost unchanged, limiting the development of a bullish impulse in the short term. MACD is rising and preserves a confident buy signal (the histogram stays above its signal line). The indicator is also attempting to consolidate above the zero level. Stochastic, after pulling back from overbought territory, is turning sideways near the 80 mark, indicating persistent risks of euro overbought conditions in the very short term.

Resistance levels: 1.1655, 1.1700, 1.1754, 1.1800.

Support levels: 1.1600, 1.1571, 1.1541, 1.1500.

Trading Scenarios and EUR/USD Forecast

Long positions may be opened after a confident breakout above 1.1655, targeting 1.1754. Stop-loss: 1.1600. Implementation horizon: 2–3 days.

A bounce from 1.1655 as resistance followed by a breakdown below 1.1600 may serve as a signal to open short positions targeting 1.1500. Stop-loss: 1.1655.