EUR/USD Price Forecast: Stable below 1.1800 in thinned traiding conditions

EUR/USD Current price: 1.1787

• Financial markets are on pause as the Christmas holidays begin.
• China threatened the US with counter tariffs if the US insist on levy chips.
• EUR/USD consolidates below 1.1800, with a modest upward bias.

The EUR/USD pair peaked at 1.1808 on Wednesday, now trading in the 1.1780 region in the American session. Markets have paused most activity ahead of Christmas Eve and the extended holiday: Europe won’t return to financial markets until next Monday.

Other than that, the usual headlines are flooding news feeds: On the one hand, United States (US) President Donald Trump took some time to criticize Federal Reserve (Fed) Chairman Jerome Powell, and said the next Fed’s head will not be an “egghead,” but someone who entirely agrees with his view of lower rates. On the other hand, Chinese authorities took some time to threaten the US with countertariffs if the US persist on adding levies on chips.

The US Dollar (USD) benefits from some profit-taking ahead of the long holidays, but also from Initial Jobless Claims: The weekly report showed that claims in the week ended December 20 rose by 214K, down from the 224K from the previous week and better than the 223K expected.

EUR/USD short-term technical outlook

The 4-hour chart shows the EUR/USD pair trading around 1.1790, little changed on a daily basis. The same chart shows that the 20-period Simple Moving Average (SMA) rises above the 100- and 200-period SMAs, with all three trending higher and the pair holding above them, keeping the near-term bias bullish. The 20-period SMA at 1.1759 offers immediate dynamic support. Technical indicators, in the meantime, have lost their upward strength but remain well above their midlines. Technical indicators, in the meantime, have lost their upward momentum but remain in positive territory, with the Relative Strength Index (RSI) indicator at 62.

In the daily chart, EUR/USD maintains its positive momentum. The 20-day SMA climbs above the 100- and 200-day SMAs, with the longer measures also edging higher, keeping buyers in control. Price stands above these references, while the 100-day SMA at 1.1659 and the 200-day at 1.1518 offer layered support. Momentum holds above its midline and continues to advance, in line with buyers' dominance. Finally, the RSI indicator has partially lost its strength after reaching overbought territory.

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