EUR/USD: The pair remains calm between 1.1750 and 1.18 on New Year holidays mood

The single European currency remains stable near the level of 1,1750 in a limited trading range where for the fourth consecutive day the fluctuation range has not exceeded 50 basis points, which seems completely logical since we are going through the festive period between Christmas and New Year's.

The year that is coming to an end leaves behind an American currency that has lost significant ground and from the levels of 1.02 at the beginning of the 2025 , it appears to be closing the year almost 1600 basis points higher near the level of 1.18.

The Fed's interest rate cut and another good year for international stock markets significantly affected the American currency, giving the euro the opportunity to take center stage, but according to many analysts, the European economy does not justify this prestige.

As no surprises appear until the end of the year, interest shifts to 2026 and to the key catalysts expected to influence the course of the exchange rate.

The policy that central banks will follow remains at the top of the agenda and will certainly be the main catalyst that will affect the pair.

The bets on Fed's intentions are quite divided, which keeps the landscape extremely cloudy, with the result that investors avoid big bets, and although several investment houses have been giving prices above 1,20 for months, these targets have not been achieved yet.

The focus on today's agenda is the release of the Minutes from the last Fed meeting, and it will be interesting to see whether could create new conclusions for the Fed's next decision.

My thoughts on market's course have not changed. I remain  cautious about the future, unable to discern any specific direction, and for this reason I remain in a wait-and-see attitude.

My thought on the possibility of buying the US currency at the 1.20 threshold remains for now.