Euro To Dollar Forecast: EUR/USD Holds Near 1.1790 as Weak Dollar and ECB Signals Support the Euro

Last week, the European Central Bank (ECB) left its key interest rate unchanged at 2.15% while maintaining a relatively optimistic outlook for the coming year. The decision was largely driven by inflation forecasts pointing to price stabilization, which supports the regulator’s intention to keep borrowing costs steady over the longer term—an outcome that remains supportive for the single currency. Meanwhile, Germany’s import price index in November declined further from –1.4% to –1.9%, while export prices accelerated from 0.2% to 0.5%, largely offsetting negative price dynamics. Spain’s gross domestic product (GDP) grew by 0.6% in the third quarter, slightly below the previous 0.7%, while annual growth eased from 2.9% to 2.8%. The adjustment is marginal and unlikely to materially affect overall eurozone GDP.

The US dollar, which continues to define short-term price action, remains under pressure and trades near 97.50 in the USD Index, extending its negative trend. US economic data released yesterday failed to support the currency, despite GDP accelerating from 3.8% to 4.3% in the third quarter. The upside surprise was offset by renewed weakness in key demand indicators. In October, durable goods orders fell by 2.2% following a 0.7% increase previously and came in well below market expectations of a –1.5% decline. In addition, the Conference Board Consumer Confidence Index dropped sharply in December from 92.9 to 89.1 points, significantly underperforming forecasts of 91.7 and marking the second-lowest reading this year after April’s 86.0.

Support and resistance levels

On the daily chart, the instrument is attempting to approach the upper boundary of the ascending channel, defined by the 1.2000–1.1520 range.

Technical indicators continue to reinforce a stable buy signal: the fast EMAs of the Alligator indicator remain above the signal line with a widening range, while the Awesome Oscillator histogram is forming corrective bars and rising in positive territory.

Resistance levels: 1.1860, 1.2040.

Support levels: 1.1750, 1.1500.

Trading scenarios and EUR/USD outlook

Long positions can be considered after a sustained move and consolidation above 1.1860, with a target at 1.2040. Stop-loss — 1.1780. Time horizon: 7 days or longer.

Short positions may be opened after a decline and consolidation below 1.1750, targeting 1.1500. Stop-loss — around 1.1820.