EUR/USD Price Forecast: At make or a break near 1.1600

EUR/USD trades calmly near 1.1600 as investors await the Eurozone flash HICP data for November.
Eurozone’s headline and core HICP are expected to have grown at a faster pace of 2.2% and 2.5%, respectively.
The Fed will likely cut interest rates at its monetary policy next week.

Sagar Dua FXStreet

The EUR/USD pair trades flat around 1.1600 during the early European trading session on Monday. The major currency pair consolidates as investors await the Eurozone preliminary Harmonized Index of Consumer Prices (HICP) data for November, which will be released on Tuesday.

Investors will pay close attention to the Eurozone inflation data as it will influence market expectations for the European Central Bank’s (ECB) monetary policy outlook.

Economists expect the headline HICP to come in at 2.2% on an annualized basis, higher from 2.1% in October. The core inflation is also expected to have accelerated to 2.5% from the prior reading of 2.4%.

Meanwhile, the US Dollar (USD) trades with caution amid growing acceptance among investors that the Federal Reserve (Fed) could cut interest rates in the monetary policy announcement next week.

According to the CME FedWatch tool, there is an 87.4% chance that the Fed will cut interest rates by 25 basis points (bps) to 3.50%-3.75% in December.

EUR/USD daily chart

In the daily chart, EUR/USD trades at 1.1593. The 20-EMA has stabilized around 1.1577, with price holding marginally above it and a modest uptick hinting at an improving short-term bias. The descending trend line from 1.1776 caps advances, resistance seen near 1.1606. RSI at 51.8 (neutral) reflects balanced momentum after a mid-month recovery.

Momentum would strengthen on a decisive close above 1.1606, opening the door for an extension of the rebound, while a break back below 1.1577 would put sellers back in control. Until then, the pair is consolidating just under trend resistance, and the flattening 20-EMA offers initial support as the broader bearish slope eases.

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

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

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