EUR/USD slips toward the 1.1600 zone as the US Dollar regains strength amid fading expectations of a December Fed rate cut. With policymakers signaling a more cautious stance, the euro faces renewed downside pressure.
Entry Zone: Sell on rallies toward 1.1625 – 1.1640
Stop Loss: Above 1.1670
Targets: 1.1580, then 1.1545 if bearish momentum extends
Catalyst Watch: Fed commentary, US reopening effects, ECB caution on weakening inflation
Trading Rationale
EUR/USD moves lower for the second straight day as markets unwind aggressive Fed cut expectations:
- CME FedWatch now shows only 46% probability of a December rate cut, down from 67% last week — giving the USD fresh traction.
- Fed officials, including Schmid, emphasized policy should remain restrictive, reinforcing dollar strength.
- Market sentiment improved after the US government reopened following a 43-day shutdown.
- ECB’s Olli Rehn warns inflation risks remain tilted lower, limiting euro upside potential.
Technically, EUR/USD rejected the 1.1630 area and slipped below its short-term moving average on H4. A sustained drop under 1.1600 exposes deeper support levels.
Key Technical Zones
Current Price: 1.1603
Potential Resistance: 1.1638 / 1.1668
Potential Support: 1.1570 / 1.1541
DISCLAIMER & CTA
DISCLAIMER: Trading forex and CFDs carries a high level of risk and may not be suitable for all investors. This analysis is for educational purposes only and does not constitute financial advice. Always trade responsibly.
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