EUR/USD Analysis Today 18/12: Future Fed Policies (Chart)

EUR/USD Analysis Summary Today

  • Overall Trend: : Upward Technical Correction
  • Support Levels for EUR/USD Today: 1.1700 – 1.1650 – 1.1570.
  • Resistance Levels for EUR/USD Today: : 1.1800 – 1.1880 – 1.1940.

EUR/USD Analysis Today 18/12: Future Fed Policies (Chart)

EUR/USD Trading Signals:

  • Buy EUR/USD from the support level of 1.1640 with a target of 1.1820 and a stop-loss at 1.1570.
  • Sell EUR/USD from the resistance level of 1.1810 with a target of 1.1500 and a stop-loss at 1.1900.

Technical Analysis of EUR/USD Today:

Amidst an upward technical correction, the EUR/USD pair jumped to its highest level in two months, briefly testing the psychological resistance level of 1.1800. This followed a widely expected US Federal Reserve interest rate cut, which simultaneously revealed deep internal divisions within the bank. Markets interpreted the split vote and Jerome Powell’s data-dependent remarks as bearish for the US Dollar against other major currencies, providing support for the Euro. Focus is now shifting to the Fed’s path for 2026 and the uncertainty surrounding the selection of Powell’s successor.

For his part, US Federal Reserve Chairman Jerome Powell emphasized the difficulty of formulating monetary policy in the face of high inflation and weak job prospects. He insisted that monetary policy would be data-driven. According to the latest updates, the median forecast points to a further rate cut in 2026, although there is considerable variation in expectations.

Overall, Fed policy will remain a core factor in 2026, especially as Powell’s term ends in May, adding to the climate of uncertainty.

EUR/USD levels confirm the upward trend.

According to reliable trading platforms and based on the daily chart, technical indicators support an upward technical correction for the EUR/USD pair. As previously mentioned, breaking the psychological resistance level of 1.1800 will be crucial for strengthening the bulls’ control and preparing for significant upward breakouts, followed by the psychological peak of 1.2000, the most prominent target for the EUR/USD in the new year. Currently, the 14-day Relative Strength Index (RSI) is near the overbought level of 70, and unless it gains new positive momentum, expect profit-taking. Simultaneously, the MACD indicator has crossed into overbought territory.

The Bearish Scenario: For the pair to return to a downward trajectory on the daily timeframe, it would require a retreat back toward the 1.1500 support level. The EUR/USD pair will be influenced today by the European Central Bank’s policy announcement, with expectations that interest rates will remain unchanged. The bank’s announcement will be at 3:15 PM Egypt time, followed by a statement from ECB President Lagarde at 3:45 PM Egypt time. On the US side, the focus will be on the weekly US jobless claims report and the Philadelphia Fed Manufacturing Index, both due at 3:30 PM Egypt time.

Trading Advice:

Be cautious. If the EUR/USD fails to break above the 1.1800 level, profit-taking may begin. Never take unnecessary risks.

EUR/USD Forecast for 2026

According to forex trading experts, Scotiabank predicts that the EUR/USD exchange rate will rise to the 1.22 resistance level by the end of 2026, with a further increase to 1.24 the following year. In the same vein, Société Générale sees the possibility of the euro/dollar exchange rate rising to the psychological resistance level of 1.20 by early 2026, but expects a gradual decline to 1.14 by the end of 2026.

Mizuho also predicted that the EUR/USD exchange rate would reach the resistance level of 1.22 by the end of 2026, noting that “Federal Reserve cuts, German fiscal spending, and increased hedging against US dollar exchange rate risks will lead to a repeat of the 2017 scenario in 2025 and 2026, but it is difficult to predict beyond that.”

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