EUR/USD Price Forecast - (EURUSD=X) Drops Toward 1.1550 as Fed Cut Odds Soar and Eurozone Data Disappoints

EUR/USD (EURUSD=X) Weakens Toward 1.1550 as Fed Cut Bets Clash with Eurozone’s Fragile Recovery

Dollar Steadies at $99.66 After Three-Day Slide, Traders Price 87% Chance of December Rate Cut

The Euro (EUR/USD) retreated on Friday toward 1.1560, reversing earlier gains above 1.1600 as the U.S. Dollar Index (DXY) stabilized around $99.66. Despite a broad three-day dollar decline, rate markets now assign an 87% probability of a 25-basis-point cut at the December FOMC meeting, sharply higher from 31% last week, per CME FedWatch. The pivot toward monetary easing was reinforced by speculation that Kevin Hassett, aligned with Trump’s pro-growth stance, could be nominated as the next Federal Reserve Chair, supporting lower-rate expectations through 2026.

This sentiment keeps Treasury yields anchored near multi-month lows — the 10-year at 3.89% and 2-year at 4.08% — restraining dollar volatility but also limiting Euro upside as traders weigh parallel ECB hesitation on further easing.

Eurozone Inflation and Employment Data Fail to Inspire Confidence

The European session brought a wave of mixed macro releases. German retail sales fell 0.3% month-over-month versus expectations of a 0.2% rise, while import prices grew 0.2% on the month and contracted 1.4% YoY, slightly better than forecasts. Net employment rose by only 1,000 jobs, far below the 5,000 expected, leaving unemployment steady at 6.3%.
France confirmed Q3 GDP growth of 0.5%, yet inflation remained stuck at 0.8%, defying projections for acceleration. Eurozone consumer confidence improved to an 8-month high, but momentum remains tepid amid structural weakness in construction and manufacturing.

The upcoming German HICP report, due at 13:00 GMT, is forecast to rise 2.4% YoY and fall 0.6% MoM, a marginal pickup from October’s 2.3%, but insufficient to shift ECB policy expectations. Traders are watching whether Bundesbank President Joachim Nagel signals concern about second-round inflation effects.

Fed-Easing Expectations Keep EUR/USD Range-Bound Despite Euro Weakness

While the USD has stabilized, its bullish attempts remain limited as global investors anticipate multiple rate cuts through 2026. U.S. economic momentum has slowed—core PCE inflation dropped to 2.7%, durable goods fell 5.4%, and consumer spending indicators softened. These factors have fueled demand for risk assets and commodities but capped sustained dollar rallies.
For EUR/USD, the dynamic is one of offsetting forces: Fed cuts weaken the dollar’s yield appeal, but a dovish ECB reduces Euro carry advantages. As a result, the pair remains trapped in a 1.1500–1.1650 corridor, awaiting a macro catalyst.

The Euro gained 0.5% weekly, though the move stems largely from dollar fatigue rather than intrinsic strength. Persistent trade frictions and energy price volatility continue to weigh on the continent’s outlook, while U.S. equity resilience reinforces the greenback’s relative safety appeal.

Technical Structure: 1.1550 Acts as Near-Term Pivot Zone

Technically, the EUR/USD pair remains under mild bearish pressure. The 4-hour RSI slipped below 50, while MACD turned negative after crossing under its signal line, suggesting fading bullish momentum. The price rejected resistance near 1.1600 earlier Friday and now consolidates under the 50-EMA (1.1567) and 200-EMA (1.1589).
A confirmed break below 1.1550 — a prior resistance zone turned support — could accelerate losses toward 1.1500 and 1.1470, where November’s swing lows sit.
On the upside, only a decisive close above 1.1595 would shift the bias bullish, targeting 1.1654 and 1.1670, with broader resistance at 1.1730.

Momentum traders are watching the ascending channel bottom near 1.1420, though this remains distant unless next week’s data underwhelms. The 50-EMA/200-EMA cluster continues to define intraday direction, reinforcing short-term neutrality.

Dollar Index (DXY) Holds Above 200-EMA, Momentum Turns Neutral

The U.S. Dollar Index (DXY) recovered modestly from $99.40 support, testing $99.78 resistance. The 200-EMA at $99.41 remains the key line of defense for bulls, while the RSI rebounded from oversold territory, hinting at consolidation rather than continuation of the decline.
A daily close above $99.80 could reopen the path to $100.38, aligning with October’s highs, while failure to defend the trendline at $99.40 risks a slide toward $99.00. Despite rising Fed-cut odds, the dollar’s global safe-haven demand continues to absorb speculative short pressure.

Cross-Pair Dynamics Reinforce EUR/USD Caution

Other majors exhibit similar hesitation. GBP/USD trades at 1.3210, capped by the 1.3264 trendline, while USD/CAD and AUD/USD show muted reactions despite commodity resilience. The CME outage earlier this session temporarily disrupted FX trading, though liquidity conditions normalized within hours.
As of the New York pre-open, the Euro remains 0.3% weaker against the USD on the day, flat vs CHF, and 0.1% higher vs JPY, showing a mixed risk sentiment environment.

Traders now turn to next week’s Eurozone CPI, U.S. ISM PMI, and PCE inflation revisions, which could determine whether EUR/USD extends its shallow pullback or resumes the slow climb above 1.16.

TradingNews.com Verdict

The EUR/USD outlook remains neutral-to-bearish in the short term. Fed policy repricing supports a floor near 1.1500, but lack of Eurozone growth momentum caps rallies above 1.1650. A break under 1.1550 would confirm renewed downside pressure, with targets at 1.1470–1.1420.
Verdict: HOLD — near-term consolidation likely between 1.1550–1.1650, awaiting U.S. data and ECB tone shift for direction.

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