EUR/USD flatlines near highs as market sentiment sours
- EUR/USD remains bid near two-month highs at 1.1700, favoured by US Dollar weakness.
- A dovish Fed monetary policy statement sent the US Dollar tumbling on Wednesday.
- Market concerns about an AI bubble are weighing on risk appetite.
EUR/USD is practically flat on Thursday, trading at 1.1695 at the moment of writing, right below the almost two-month highs above 1.1700 hit on Wednesday. The risk-averse mood triggered by downbeat earnings data from Oracle has offset investors' optimism following a dovishly tilted monetary policy statement by the Federal Reserve (Fed).
Sales and revenue forecast released by the cloud computing giant Oracle on Wednesday missed market expectations. The company has made significant investments in AI technology, including a $300 billion deal with OpenAI, and plans to build AI data centers. Fears of an AI bubble are back on the table, sending Asian equity markets lower and pointing to a negative session in Europe.
The risk-averse sentiment has provided some support to the safe-haven US Dollar, which had tumbled against most currency peers, following a less hawkish-than-expected monetary policy decision by the Fed on Wednesday. The US central bank cut interest rates by 25 basis points, as expected, but hawkish dissent was weak, and Chairman Jerome Powell showed more relaxed about inflation, which hints at further rate cuts in 2026.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.00% | 0.10% | 0.05% | 0.20% | 0.54% | 0.29% | 0.00% | |
| EUR | 0.00% | 0.10% | 0.05% | 0.20% | 0.54% | 0.29% | 0.00% | |
| GBP | -0.10% | -0.10% | -0.04% | 0.09% | 0.44% | 0.18% | -0.10% | |
| JPY | -0.05% | -0.05% | 0.04% | 0.15% | 0.50% | 0.22% | -0.03% | |
| CAD | -0.20% | -0.20% | -0.09% | -0.15% | 0.35% | 0.08% | -0.19% | |
| AUD | -0.54% | -0.54% | -0.44% | -0.50% | -0.35% | -0.26% | -0.53% | |
| NZD | -0.29% | -0.29% | -0.18% | -0.22% | -0.08% | 0.26% | -0.28% | |
| CHF | -0.00% | -0.01% | 0.10% | 0.03% | 0.19% | 0.53% | 0.28% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Movers: Risk aversion halts the Euro's rally
- The Euro jumped on US Dollar weakness following Wednesday's Fed decision, but bulls have been halted above 1.1700 amid the risk-averse market. If sentiment remains sour, the Euro is likely to struggle. Downside attempts, however, are likely to remain limited amid the dovish Fed message.
- The Federal Reserve cut rates by 25 basis points to the 3.50%-3.75% range on Wednesday, and the dot plot signalled only one further rate cut in 2026. The absence of a more hawkish divergence, with only two votes calling for steady rates, and Chairman Powell's comments ruling out rate hikes, are keeping investors confident that the bank will cut rates at least two more times next year, as reflected on the CME Group FedWatch tool.
- Beyond that, the market is also pricing the replacement of Jerome Powell by a more dovish Kevin Hassett at the end of his term in May. Hassett, the White House economic adviser, affirmed earlier this week that there is "plenty of room" to cut interest rates further.
- The Fed also announced a bond-buying program starting on December 12 with an initial round of $40 billion, aiming to support market liquidity, which took investors by surprise and added pressure on the USD.
- In Europe, the European Central Bank (ECB) President, Christine Lagarde, stuck to her usual rhetoric while talking at the Financial Times Global Boardroom Conference in London on Wednesday. She reiterated that the bank's monetary policy remains in good shape and suggested that ECB officials might lift the region's growth forecasts again, adding to evidence that the easing cycle has reached its end.
- The European economic calendar is void on Thursday, while in the US, Initial Jobless Claims data will be observed with interest to confirm whether the previous week's decline was due to the Thanksgiving holiday or it was a signal of some improvement in the labour market.
Technical Analysis: EUR/USD is pushing against resistance at the 1.1700 area
The EUR/USD technical picture has turned positive after breaking resistance at the 1.1680 area. The 4-hour Moving Average Convergence Divergence (MACD) is printing green bars, showing a strong bullish momentum, and the 4-hour Relative Strength Index (RSI) is in positive territory, still below overbought levels. In this context, and with the US Dollar Index depressed, further appreciation is on the cards.
Immediate resistance is at the intraday high, at 1.1705, ahead of the October 17 high, near 1.1730, and the October 1 high around 1.1780. On the downside, the December 4 high, near 1.1680, is providing support ahead of the December 9 low, at 1.1615, and the December 1 and 2 lows, around 1.1590.
Risk sentiment FAQs
In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.
Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.
The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.
The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
