EUR/USD. Analysis and Forecast

[Ben Graham]

Today, Friday, the EUR/USD pair attempted to attract buyers on the decline, breaking a two-day losing streak. The U.S. dollar continues to hold strong positions, consolidating near a monthly high after gaining over the past two days.

At the moment, a decline in the dollar seems unlikely given the Federal Reserve's "hawkish" policy. Moreover, Fed Chair Jerome Powell dismissed market expectations of another rate cut in December. Combined with renewed demand for safe-haven assets, this should limit further dollar declines and prevent more substantial losses.

On Thursday, for the third time in a row, the European Central Bank left its key deposit rate unchanged at 2%. During the meeting, the regulator emphasized that inflation remains close to its medium-term target of 2%. However, the ECB also warned of ongoing uncertainty in the eurozone's economic outlook amid global trade disputes and geopolitical tensions. Political disagreements over future rate-cutting steps are creating uncertainty and could limit the euro's growth in the EUR/USD pair, as well as reduce trader activity while they await more aggressive market moves.

In such a situation, it would be prudent to wait for confirmation of further buying before preparing for additional pair growth. On the other hand, a break below the support range of 1.1550–1.1540 could serve as a signal for a bearish scenario to develop, opening the way to more significant losses.

For now, the EUR/USD pair shows a downward trend, continuing to depend on dollar dynamics. The impact of speeches by key FOMC members, scheduled for later this Friday, may become an important factor influencing the pair further. From a technical standpoint, oscillators on the daily chart remain negative, and there are still no signs of growth. The main resistance for the EUR/USD pair on the upside is at the round level of 1.1600, followed by resistance at the 9-day EMA. However, breaking below the 1.1550 support level would push the pair toward the round level of 1.1500.

The material has been provided by InstaForex Company - www.instaforex.com