- The EUR/USD forecast remains neutral with no clear bias.
- Easing Fed dovishness keeps US dollar strong.
- The market is waiting for a stimulus to break out of the current range.
The EUR/USD forecast remains neutral for the day as the economic calendar is light and trading activity is weak. The pair tried to gain some ground from Friday’s lows, but failed to sustain the rally at 1.0570. Broader dollar strength overshadows recovery in risk assets.
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Geopolitics have once again taken center stage with the renewed heat of the Russian-Ukrainian crisis. Thus, risk-off sentiment favors the US dollar and keeps pressure on the euro. Moreover, fears of a trade war between the European Union and the US also worsened the outlook for the euro.
After Trump’s victory, market analysts revised their forecast for the US dollar in 2025, expecting a sharp rise in the currency. Fed bets were also eased as the path to rate cuts could be slowed. Fed President Jerome Powell said he could not predict Trump’s policy guidance on future interest rate cuts. He also said that economic indicators did not send signals for rate hikes. Inflation is slowly moving towards a sustainable target of 2% which could help us reach the neutral rate.
Key events to watch
There is no major event on the calendar today. However, market participants may be looking for some fresh clues in today’s ECB speech on monetary policy by Chir Lagarde.
EUR/USD Technical Forecast: Range-bound behavior
The EUR/USD forecast remains elusive as buyers try to stay above the 1.0500 mark but fail to sustain gains above 1.0570. The 4-hour chart shows that the price remains in a tight range since November 13. The pair may be looking for fresh impetus to break out of the range on either side.
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The 30-SMA lies above the price, indicating sustained bearish momentum, while the RSI has moved to the 40.0 level, indicating that the pair is out of oversold condition and the downward momentum may continue.
Technically, the pair needs acceptance above 1.0600 to trigger bullish momentum, while a break above 1.0500 could lead to a strong sell towards the 1.0450 area.
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