EUR/USD Current price: 1.0356

  • The US Federal Reserve trimmed the benchmark rate by 25 basis points as expected.
  • Fed officials are confident on economic progress, foresee two rate cuts in 2025.
  • The EUR/USD pair is on its way to retest the year low and even fall below it.

The EUR/USD pair is ending Wednesday near its 2024 low, as the US Dollar gathered momentum following the United States (US) Federal Reserve’s (Fed) monetary policy announcement. The Fed delivered a 25 basis points (bps) interest rate cut as widely anticipated, with the Summary of Economic Projections (SEP) or dot plot triggering a risk-averse reaction across financial boards.

The document showed that policymakers now expect the (Personal Consumption Expenditures) PCE inflation at 2.5% at the end of 2025, against the 2.1% foreseen in September. Growth, as measured by the Gross Domestic Product (GDP) is now seen at 2.1% versus 2.0% previously, while the Unemployment Rate is expected to e at 4.3%, slightly below the 4.4% estimated in September.

Finally and more relevantly, the SEP or dot-plot showed policymakers now foresee two rate cuts in 2025. As a result, market participants rushed away from high-yielding assets. Stocks plunged alongside European and commodity-related currencies. Speculative interest rushed to price in an on-hold interest rate in January, with the odds for it roughly at 90%.

Chairman Jerome Powell later clarified: “We will be looking for further progress on inflation to make those cuts.” Powell added that the decision to trim rates was a “close call” and sounded pretty confident about economic developments, noting the economy is performing “very, very well” and that the country avoided a recession. Finally, he added that policymakers have to maintain the restrictive policy to get inflation to their target goal of 2%.

The US will release the final estimate of the Q3 Gross Domestic Product (GDP) and weekly unemployment figures on Thursday.

EUR/USD short-term technical outlook

From a technical point of view, the EUR/USD is bearish and poised to extend its slump. The daily chart shows that, after repeatedly meeting sellers around a bearish 20 Simple Moving Average (SMA), the pair collapsed. The 100 and 200 SMAs slowly grind lower far above the shorter one, while technical indicators head south within negative levels, in line with a strong bearish momentum.

The near-term picture supports a test of the year low at 1.0332. In the 4-hour chart, technical indicators entered oversold territory while maintaining their vertical slopes, hardly suggesting an interim bottom ahead. At the same time the pair fell well below all its moving averages, forcing the 20 SMA lower below the longer ones.

Support levels: 1.0330 1.0290 1.0250

Resistance levels: 1.0400 1.0440 1.0485

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

Gold hovers around all-time highs near $3,250

Gold hovers around all-time highs near $3,250

 

Gold is holding steady near the $3,250 mark, fuelled by robust safe-haven demand, trade war concerns, and a softer-than-expected US inflation gauge. The US Dollar keeps trading with heavy losses around three-year lows.

Gold News
EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines

EUR/USD retreats towards 1.1300 as Wall Street shrugs off trade war headlines

The EUR/USD pair retreated further from its recent multi-month peak at 1.1473 and trades around the 1.1300 mark. Wall Street manages to advance ahead of the weekly close, despite escalating tensions between Washington and Beijing and mounting fears of a US recession. Profit-taking ahead of the close also weighs on the pair. 

EUR/USD News
GBP/USD trims gains, recedes to the 1.3050 zone

GBP/USD trims gains, recedes to the 1.3050 zone

GBP/USD now gives away part of the earlier advance to fresh highs near 1.3150. Meanwhile, the US Dollar remains offered amid escalating China-US trade tensions, recession fears in the US, and softer-than-expected US Producer Price data.

GBP/USD News
Bitcoin, Ethereum, Dogecoin and Cardano stabilze –  Why crypto is in limbo

Bitcoin, Ethereum, Dogecoin and Cardano stabilze –  Why crypto is in limbo

Bitcoin, Ethereum, Dogecoin and Cardano stabilize on Friday as crypto market capitalization steadies around $2.69 trillion. Crypto traders are recovering from the swing in token prices and the Monday bloodbath. 

Read more
Is a recession looming?

Is a recession looming?

Wall Street skyrockets after Trump announces tariff delay. But gains remain limited as Trade War with China continues. Recession odds have eased, but investors remain fearful. The worst may not be over, deeper market wounds still possible.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025