EUR/USD tests above 1.1000 as markets bet big on Fed rate cuts

EUR/USD pierced 1.1000 on Thursday as broad-market risk appetite pins into the high side.
US inflation figures point to continued price growth deceleration, ramping up rate-cut bets.
Friday poised to wrap up the trading week with a final round of US PCE inflation.

Joshua Gibson FXStreet

The EUR/USD climbed on Thursday, bolstered back into the 1.1000 handle as broad-market risk appetite pinned into the high side, fueled by US inflation figures continuing to decline faster than market forecast models can account for. Investors are increasing their bets that the Federal Reserve (Fed) will face faster, deeper rate cuts, with money market expectations running far ahead of the Fed’s own rate expectations for 2024.

The Fed’s dot plot of interest rate expectations currently sees 75 basis points of rate cuts by the end of 2024, and money markets have deeply repriced their rate forecasts for next year, projecting upwards of 160 basis points through 2024, with many investors banking on rate cuts beginning as soon as next March.

US inflation continues to cool faster than expected, ramping up rate cut hopes

US Core Personal Consumption Expenditures (PCE) rose 2.0% in the third quarter versus the second quarter’s 2.3%, slipping below the median market forecast of a hold at 2.3%.

US Annualized Gross Domestic Product (GDP) also grew at a slower pace in the third quarter than markets were forecasting, coming in at 4.9% over the third quarter last year, missing the market expectations of a hold at 5.2%.

Friday sees the US’ last inflation print of the year with the US PCE Price Index expected to tick lower from 3.5% to 3.3%, and another miss in inflation numbers will likely see markets pin rate cut hopes even higher than they already are.

EUR/USD Technical Outlook

EUR/USD’s climb into the 1.1000 handle has the pair testing into last week’s peak bids, and the pair is up over one percent from the week’s low bids at 1.0888.

Intraday price action continues to bid well above the 200-hour Simple Moving Average (SMA) rising into 1.0900, and near-term technical resistance remains thin as the pair takes a run at November’s peak of 1.1017.

EUR/USD Hourly Chart

EUR/USD Daily Chart

EUR/USD Technical Levels

EUR/USD

Overview
Today last price	1.1005
Today Daily Change	0.0073
Today Daily Change %	0.67
Today daily open	1.0932

Trends
Daily SMA20	1.0882
Daily SMA50	1.076
Daily SMA100	1.0754
Daily SMA200	1.0834

Levels
Previous Daily High	1.0985
Previous Daily Low	1.0931
Previous Weekly High	1.1009
Previous Weekly Low	1.0742
Previous Monthly High	1.1017
Previous Monthly Low	1.0517
Daily Fibonacci 38.2%	1.0952
Daily Fibonacci 61.8%	1.0964
Daily Pivot Point S1	1.0914
Daily Pivot Point S2	1.0896
Daily Pivot Point S3	1.086
Daily Pivot Point R1	1.0967
Daily Pivot Point R2	1.1003
Daily Pivot Point R3	1.1021

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD gathers strength above 1.1750 as Fed rate cut prospects pressure US Dollar

The EUR/USD pair trades in positive territory around 1.1775 during the early Asian session on Monday. The prospect of a US Federal Reserve rate cut in 2026 weighs on the US Dollar against the Euro. Markets brace for US President Donald Trump to nominate a Fed chair to replace Jerome Powell, whose term ends in May.

GBP/USD edges lower near 0.7400, eyes Fed rate cut outlook

GBP/USD edges lower after a gap-up open, trading around 0.7410 during the Asian hours on Monday. However, the pair may gain ground as the US Dollar faces challenges, which could be attributed to growing expectations of two more rate cuts by the Federal Reserve in 2026.

Gold retreats from record highs, heads toward $4,550

Gold retreats after setting a new record-high at $4,550 earlier in the Asian session on Monday and eases toward $4,500 as trading volumes thin out ahead of the New Year break. The US Dollar bearish bias remains unabated on the back of dovish Fed expectations, which continues to act as a tailwind for the bullion amid persistent geopolitical risks.

Ethereum Annual Price Forecast: ETH poised for growth in 2026 amid regulatory clarity and institutional adoption

Ethereum lost 12% of its value in 2025, declining from $3,336 at the beginning of the year to $2,930 as of the third week of December, a stark contrast from 2024's 48% gain. But that percentage doesn't do justice to the wild year ETH had in 2025.

Economic outlook 2026-2027 in advanced countries: Solidity test

After a year marked by global economic resilience and ending on a note of optimism, 2026 looks promising and could be a year of solid economic performance. In our baseline scenario, we expect most of the supportive factors at work in 2025 to continue to play a role in 2026.

Avalanche struggles near $12 as Grayscale files updated form for ETF

Avalanche trades close to $12 by press time on Wednesday, extending the nearly 2% drop from the previous day. Grayscale filed an updated form to convert its Avalanche-focused Trust into an ETF with the US Securities and Exchange Commission.