EUR/USD Price Forecast: Bulls hold the grip, on pause ahead of central banks

EUR/USD Current price: 1.1632

• Tepid German data and France political turmoil limit Euro’s advance.
• Trade deals headlines underpin the mood ahead of Fed, ECB announcements.
• EUR/USD holds on to modest intraday gains after reaching a fresh weekly high.

The EUR/USD pair trades around 1.1630, easing from an early peak of 1.1668. The pair sees little action, but managed to post a higher high on a daily basis, while adding ground for a fifth consecutive day.

A better market mood undermines demand for the US Dollar (USD) in the near term, amid easing trade tensions. Following Monday’s news hinting a working framework between the United States (US) and China, markets found out on Tuesday that the US and Japan had reached a deal on rate earths supply and production, which also reaffirms previous agreements.

Meanwhile, Euro (EUR) gains remain capped by soft local data and local political woes. On the one hand, Germany published the GfK Consumer Confidence Survey, which shrank in November to -24.1 from the previous -22.3 and against expectations of -22. On the other hand, the French government opposed the Socialist Party's proposal for a more socially fair tax bill.

The pair’s inaction is also linked to the upcoming central banks’ announcements. The US Federal Reserve (Fed) is scheduled to announce its monetary policy decision on Wednesday, while the European Central Bank (ECB) will do so on Thursday.

EUR/USD short-term technical outlook

In the 4-hour chart, EUR/USD is currently trading at around 1.1632, little changed on a daily basis. A bullish 20 SMA advances at 1.1632, now marginally above the 100 SMA at 1.1628, signaling buyers are attempting to regain the short-term lead. However, the 200 SMA remains southbound, capping the upside at around 1.1691. At the same time, the Momentum indicator has faded from recent positive readings and now hovers near its midline, reflecting waning upside speed. Meanwhile, the RSI retreated to 49.6 from above 60, returning to the neutral band and indicating absent directional strength with a slight bearish tilt. A sustained push while the 20 SMA continues to advance, followed by clearance of the 200 SMA resistance at 1.1691, would strengthen recovery prospects; conversely, failure to defend the 100 SMA support at 1.1628 risks a resumption of the downside in line with the longer-term moving averages.

In the daily chart, a bearish 20 SMA extends its slide below a still bullish 100 SMA, reinforcing the short-term downside bias and hinting at additional weakness ahead as sellers hold the grip. The 20 SMA stands at 1.1645, capping the immediate upside, while a bullish 100 SMA at 1.1664 advances above the shorter average, defining a nearby resistance band at 1.1645–1.1664. At the same time, the Momentum indicator has recovered into mildly positive territory over recent sessions but remains flat, in line with the lack of directional strength. Finally, the RSI eased to 46.7, endorsing a bearish tilt.

(This content was partially created with the help of an AI tool)