- The dollar ended the week down as US markets remained closed for the Thanksgiving holiday.
- ECB’s Fracois Villeroy said the central bank should implement a bigger rate cut.
- Data on Thursday showed a 0.2% decline in price pressures in Germany.
The EUR/USD price analysis indicates continued euro strength as the dollar eases due to an increasing chance of a Fed rate cut in December. Nevertheless, the euro is heading for a bearish month, having lost 2.8% of its value mainly due to Trump’s win.
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The dollar ended the week down as US markets remained closed for the Thanksgiving holiday, keeping trading thin. Moreover, US inflation figures on Wednesday revealed an expected increase, solidifying bets for a December Fed rate cut. However, market participants are still waiting for more data before the meeting to gauge whether policymakers will vote to lower borrowing costs. The next major economic report will be the nonfarm payrolls, due next week.
Meanwhile, the euro soared to a one-week high after hawkish ECB remarks on Wednesday. Isabel Schnabel said the central bank should consider a gradual pace for rate cuts. However, on Thursday, ECB’s Fracois Villeroy said the central bank should implement a bigger rate cut at next month’s meeting. Nevertheless, the euro remained steady due to dollar’s weakness.
The Eurozone economy has deteriorated faster than most major economies, putting pressure on the European Central Bank to cut interest rates. At the same time, inflation has eased, with data on Thursday showing a 0.2% decline in price pressures in Germany.
Increasing rate cut bets and Trump’s tariff threats have weighed on the euro in November. The currency has lost nearly 2.8% of its value. If these factors remain in play, the downtrend will continue next month.
EUR/USD key events today
There won’t be any key economic reports from the Eurozone or the US today.
EUR/USD technical price analysis: Bulls losing enthusiasm
On the technical side, the EUR/USD price has maintained its position above the 30-SMA, indicating a bullish bias. At the same time, the RSI trades above 50, in bullish territory.
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However, price action shows that bulls are struggling to detach from the SMA and the 1.0500 key level. Therefore, EUR/USD might consolidate at this level before either climbing towards the 1.0700 resistance or breaking below 1.0500.
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Saqib Iqbal
