EUR/USD Price Forecast: Bulls retain control despite mounting risk aversion

EUR/USD Current price: 1.1745

• Geopolitical tensions undermine the mood but fail to support the US Dollar.
• The United States will publish the preliminary estimate of the Q3 GDP on Tuesday.
• EUR/USD aims north in the near term, could retest the 1.1800 mark.

The EUR/USD pair advances on Monday, currently trading at around 1.1740 amid prevalent US Dollar (USD) weakness. Market players seem to be ignoring increased risk aversion, or at least, not going for the safe-haven Greenback despite mounting tensions in the Middle East. Indeed, Gold prices have reached record highs, reflecting the ongoing dismal mood.

Weekend headlines indicated that Israeli Prime Minister Benjamin Netanyahu is worried about Iran expanding its ballistic missile program, and plans to brief United States (US) President Donald Trump about the options of resuming attacking Iran.

Other than that, the winter holidays’ doldrums are likely to maintain the FX board lifeless. The macroeconomic calendar has little to offer on Monday and will remain scarce throughout the week, except for the release of the preliminary estimate of the US Q3 Gross Domestic Product (GDP).

EUR/USD short-term technical outlook

In the 4-hour chart, the risk for EUR/USD skews to the upside. The 20-period Simple Moving Average (SMA) holds above the 100- and 200-period SMAs, and all three edge higher, with the 20 SMA at 1.1726 offering immediate dynamic support. At the same time, the Momentum indicators aim higher within neutral levels, while the Relative Strength Index (RSI) indicator prints 58 and edges higher, keeping the tone positive and hinting at higher highs ahead. The short-term bias would stay positive while the pair holds above the mentioned 20 SMA.

In the daily chart, EUR/USD's bullish case is even clearer. The 20-day SMA climbs above the 100- and 200-day SMAs, with the shorter one currently at 1.1670. Buyers are likely to defend the downside around the later should the pair retreat. Meanwhile, an ascending 100 SMA stands at 1.1656, reinforcing the price region. Finally, the Momentum indicator aims north above its midline while the RSI also advances, currently at 65, favoring a continued advance.

(The technical analysis of this story was written with the help of an AI tool)