EUR/USD Price Forecast: Sellers taking over after hawkish FOMC Minutes

EUR/USD Current price: 1.1775

• The FOMC Meeting Minutes surprised with a hawkish shift, boosting US Dollar demand.
• Geopolitical tensions in the Middle East exacerbate the USD safe-haven demand.
• EUR/USD turned bearish in the near term and aims to extend its decline.

The EUR/USD pair pierced the 1.1800 mark on Wednesday, as the US Dollar (USD) benefited from a hawkish Federal Open Market Committee (FOMC) Minutes. The document showed that policymakers noted that “a two-way description of the path of policy could be supported,” hinting not only at possible rate cuts but also hikes.

The minutes also showed policymakers remain quite divided over the monetary policy path, as several officials left the door open for additional cuts if inflation continues to decline, while others favored an on-hold stance for “some time.”

The Greenback retreated throughout the first half of Thursday, but sellers reappeared around 1.1800. Heading into the American opening, EUR/USD trades in the 1.1750 region, its lowest in two weeks.

Meanwhile, geopolitical tensions exacerbate the USD safe-haven condition. According to CBS, the US military is ready for possible strikes on Iran as soon as Saturday.

Data-wise, the EU published the December Current Account, which posted a seasonally adjusted surplus of €14.6 billion, surpassing the expected €9.2 billion. The United States (US) will release Initial Jobless Claims, the December Goods and Services Trade Balance, and the February Philadelphia Fed Manufacturing Survey. Later in the American session, the European Commission will publish February Consumer Confidence.

EUR/USD short-term technical outlook

The near-term picture is bearish. The 4-hour chart shows that EUR/USD is piercing a flat 200-period Simple Moving Average (SMA), while extending its decline below the 20-period and the 100-period SMAs, which slope lower above the current level. The Momentum indicator remains directionless below its midline, while the Relative Strength Index (RSI) indicator maintains its downward slope at 30, hinting at additional declines ahead. The 20-period SMA provides resistance at around 1.1820.

In the daily chart, EUR/USD is down for a third consecutive day, extending its decline below its 20-day SMA, which lost its bullish slope. The 100- and 200-day SMAs remain below the current level, also losing their bullish slopes. Meanwhile, the Momentum indicator ticked higher but remains within negative levels, while the RSI indicator maintains its bearish slope at around 44, also supporting lower lows ahead.

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