- EUR/USD softened further on Tuesday, testing 1.0500 once again.
- The Fiber pair has closed slightly lower for a third straight day.
- Euro traders are bracing for back-to-back key data prints.
EUR/USD shed close to 0.2% on Tuesday, chalking in a third straight declining trading day and testing down into the 1.0500 handle as the Euro’s near-term bullish recovery fizzles out. Fiber is backsliding into a cautious stance ahead of a key US Consumer Price Index (CPI) inflation print due on Wednesday, with another rate call from the European Central Bank (ECB) just around the corner on Thursday.
Wednesday’s CPI inflation print, which serves as one of the last key data releases before the Federal Reserve’s (Fed) last policy meeting in 2024. Signs that progress on inflation has stalled could kill hopes for a third consecutive rate cut on December 18. At the current cut, Wednesday’s US CPI inflation for November is expected to rise slightly to 2.7% YoY from the previous 2.6%, while core annualized CPI is forecast to hold steady at 3.3%.
According to the CME’s FedWatch Tool, rate traders are pricing on 85% odds of one last quarter-point rate cut for the year.
The ECB’s latest rate call is set for Thursday, and the rate meeting is widely expected to deliver another quarter-point cut to investors. The ECB’s Main Refinancing Operations Rate is forecast to get trimmed to 3.15% from 3.4%, while the ECB Rate on Deposit Facility is anticipated to decline to a flat 3.0% from 3.25%.
EUR/USD price forecast
The EUR/USD daily chart highlights the continuation of a bearish medium-term trend, as the pair remains comfortably below the 50-day EMA at 1.0696 and the 200-day EMA at 1.0826. After the sharp sell-off in November, which saw the pair plunge to a multi-month low near 1.0450, EUR/USD has been consolidating in a tight range. Recent attempts to reclaim the 1.0600 handle have faltered, underscoring the strength of the prevailing bearish sentiment. The broader downtrend remains intact, with lower highs and lower lows defining price action since late October.
The most recent candle closed with a bearish tone at 1.0531, marking a decline of 0.18% on the day. Despite a brief attempt to push higher during the session, the pair failed to sustain momentum above 1.0560, resulting in a long upper wick and signaling selling pressure. Key support at 1.0500 is now back in focus, with a break below this level likely to expose the November low of 1.0450. Conversely, immediate resistance resides at 1.0600, with the descending 50-day EMA adding to the challenge for bulls.
The MACD histogram remains slightly positive but is flattening, indicating fading bullish momentum from the recent rebound. Furthermore, the MACD line is below the signal line, suggesting bearish control persists. To shift sentiment, bulls need a clear break above 1.0600, which could spark a recovery toward 1.0700. However, failure to hold above 1.0500 would likely confirm the bearish trend, paving the way for an extension toward 1.0400 in the coming sessions.
EUR/USD daily chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day, according to data from the Bank of International Settlements. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% of all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD retakes 0.6000 on the road to recovery amid US-China trade war
AUD/USD is off the five-year low but remains heavy near 0.6000 in the Asian session on Monday. The pair continues to suffer from a US-China trade war as US President Trump said that he would not do a deal with China until the US trade deficit was sorted out.
USD/JPY attempts tepid recovery above 146.00
USD/JPY kicks off the new week on a weaker note, though it manages to stage a tepid recovery above 146.00 early Monday. The global carnage, amid the mounting risk of a recession and a trade war led by Trump's sweeping tariffs, keeps the safe-haven Japanese Yen underpinned at the expense of the US Dollar.
Gold buyers refuse to give up amid global trade war and recession risks
Gold price is holding the quick turnaround from one-month lows of $2,971, consolidating the recent downward spiral. The extension of the risk-off market profile into Asia this Monday revives the safe-haven demand for Gold price.
Bitcoin could be the winner in the ongoing trade war after showing signs of decoupling from stocks
Bitcoin traded above $84,000 on Friday, showing strength despite the stock market experiencing significant declines. The market reaction stems from United States President Donald Trump's clash with the Federal Reserve Chairman Jerome Powell over interest rate decisions.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.