EUR/USD Price Forecast: Consolidating in holiday’s trading

EUR/USD Current price: 1.1760

• Diminished volumes due to the New Year’s holiday maintain major pairs within limited ranges.
• The FOMC will release the Minutes of the December meeting next Wednesday.
• EUR/USD turns bearish in the near term, but the odds of a steeper decline are limited.

The EUR/USD pair hovers around 1.1760 early in the American session on Monday, unchanged on a daily basis. The US Dollar (USD) started the week with a soft tone. Still, the pair was unable to advance beyond the 1.1800 mark, as holiday diminished volumes contain major pairs within limited intraday ranges.

Financial markets have little to focus on this week, as the macroeconomic calendar won’t offer any relevant data. However, the Federal Open Market Committee (FOMC) will release the Minutes of the December meeting next Wednesday. The document usually sheds light on policymakers’ thinking during the rate-decision meeting. Given the limited trading volumes, the news can trigger a reaction in USD.

The EU did not publish relevant data earlier in the day, while the United States (US) will soon release November Pending Home Sales and the Dallas Fed Manufacturing Business Index for December.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD pair is bearish in the 4-hour chart. The EUR/USD trades at 1.1761, below the day's opening by 16 pips and little changed on a daily basis. In the same chart, the 20-period Simple Moving Average (SMA) has flattened near 1.1780, providing dynamic resistance. At the same time, the pair remains above rising 100- and 200-period SMAs, preserving a positive medium-term tone. Meanwhile, the Momentum indicator edges lower below its midline, signaling waning buying interest. The Relative Strength Index (RSI) indicator stands at 45 and inches down, aligning with the increased downward bias. A decisive push above the 20 SMA would revive upside traction, whereas a break beneath the 100 SMA would open the door for a deeper retracement toward the longer baseline.

In the daily chart, EUR/USD trades above all its moving averages, with the 20-day SMA rising above the 100- and 200-day SMAs, with all three sloping higher, reinforcing a bullish bias. The 20-day SMA at 1.1716 offers nearby dynamic support. Finally, the Momentum indicator remains above its midline, though it has eased modestly, signaling steady buying interest while the RSI indicator stands at 62, easing from its recent highs.

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