- The dollar ended the week lower as US markets remained closed for the Thanksgiving holiday.
- The ECB’s François Villeroy said the central bank should implement a bigger rate cut.
- Data on Thursday showed a 0.2% drop in price pressures in Germany.
EUR/USD price analysis points to continued euro strength as the dollar eases on the growing chance of a Fed rate cut in December. Regardless, the euro is heading for a bearish month, having lost 2.8% of its value largely due to Trump’s victory.
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The dollar ended the week lower as US markets remained closed for the Thanksgiving holiday, keeping trading light. Moreover, US inflation data on Wednesday revealed an expected increase, firming bets for a December Fed rate cut. However, market participants are still waiting for more data ahead of the meeting to gauge whether policymakers will vote for lower borrowing costs. The next big economic report will be nonfarm payrolls, due next week.
Meanwhile, the euro jumped to a one-week high after the ECB’s hawkish remarks on Wednesday. Isabelle Schnabel said the central bank should consider a gradual pace of interest rate cuts. However, on Thursday, the ECB’s François Villeroy said the central bank should implement a bigger rate cut at its meeting next month. However, the euro remained stable due to the weakness of the dollar.
The eurozone economy has deteriorated faster than most major economies, putting pressure on the European Central Bank to cut interest rates. At the same time, inflation has eased, with Thursday’s data showing a 0.2% drop in price pressures in Germany.
Increasing bets on a rate cut and Trump’s threats of tariffs weighed on the euro in November. The currency lost almost 2.8% of its value. If these factors remain in play, the downtrend will continue next month.
EUR/USD key events today
There will be no key economic reports from the Eurozone or the US today.
Technical analysis of EUR/USD prices: Bulls are losing enthusiasm
From the technical side, EUR/USD the price has maintained its position above the 30-SMA, indicating a bullish bias. At the same time, the RSI is trading above 50, in bullish territory.
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However, the price action shows that the bulls are struggling to break away from the SMA and the key 1.0500 level. Therefore, EUR/USD could consolidate at this level before climbing towards the 1.0700 resistance or breaking below 1.0500.
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