- The downward trend of the EUR/USD currency pair remains the strongest, and the 1.05 support will continue to be a positive momentum for bears.
- It is preparing for stronger losses if the results of US economic releases this week come stronger than expected, along with paying attention to the US Federal Reserve’s announcement.
- This is ahead of the Christmas holidays and investors stopping their investment portfolios during the holidays.
- Last week, the Euro-US Dollar’s losses extended to the 1.0453 support level before closing the week’s trading stable down around the 1.0502 level.
The European Central Bank cuts interest rates and promises more
Last week, for the third consecutive meeting, the European Central Bank cut interest rates, indicating more cuts during 2025, as inflation approaches 2% and the European economy struggles amid economic and political uncertainty led by the bloc’s largest economies. In a sign of its changing stance, the ECB dropped the wording of its statement, saying policy would remain “sufficiently restrictive” for as long as necessary.
The ECB’s announcement comes at a sensitive time as investor and market sentiment towards the eurozone’s economic recovery is fragile and worsening as the bloc’s largest economies – Germany and France – are leading the economic slowdown and political uncertainty. This has weakened the eurozone’s economic growth forecast for 2025. Consequently, the chances of further interest rate cuts by the ECB in upcoming meetings are stronger. Overall, the euro’s path will be monitored by the future of the German elections and the treatment of the deficit in France, which has weakened France’s credit rating to negative.
Will the Euro Price Rise in the Coming Days?
According to licensed trading companies and forex analysts’ forecasts, we do not expect the euro price to rise in the coming days, and any opportunities for an upward rebound may be targets for new sales. In addition to the political and economic concerns of the Eurozone, Trump’s upcoming policies will affect the performance of the Eurozone economy, which is internally struggling and externally affected by Trump’s trade wars. The bloc’s economy relies on exports to the outside world. In addition, the fate of the German elections and its handling of the deteriorating economic situation, as well as the improvement in French deficit figures, will remain under the watchful eye of investors and markets to find opportunities for the euro to recover.
Trading Tips:
The Euro-Dollar price may remain bearish and below the 1.05 support, which warns of a strong technical downward move coming if the political and economic pressures on the Euro increase, in addition to the future of US policy under Trump’s leadership.
The US Central Bank may cut interest rates cautiously
This week, all eyes will be on the US Federal Reserve’s monetary policy meeting, during which policymakers are expected to push for a quarter-point cut in US interest rates. However, Deutsche Bank AG and BNP Paribas expect no further action by the Federal Reserve this year. Monetary easing is also expected to slow more in 2025 than officials expected three months ago, with most economists expecting only three US interest rate cuts in 2025.
EUR/USD Analysis Today:
You should take into account that the downward path of the Euro against the US Dollar EUR/USD will become stronger as long as it is technically stable below the psychological support of 1.0500. If the results of important economic data and events this week are in favour of the strength of the dollar, expect the date of the parity price for the Euro Dollar to approach, and technically this may happen if the bears move the currency pair to the support levels of 1.0420 and 1.0300 first. In contrast, and on the same time frame, the daily chart will not witness an initial break of the downward trend without rebounding above the resistance levels of 1.0765 and 1.0830, respectively.
In general, we still prefer to sell the Euro Dollar from every upward level. Furthermore, without risk and activating profit limit and stop loss orders to ensure the safety of the trading account from any sudden price reversals.
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