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The release of the November meeting minutes of the U.S. Fed confirmed that policymakers are in no rush to cut rates. While inflation has moderated, Fed officials emphasized the need for “greater confidence” before easing policy, keeping the dollar supported and tempering aggressive bullish bets on EUR/USD.
EUR/USD continues to trade within a bullish structure, with price action hovering near 1.1600 after a modest pullback. While short-term momentum indicators like RSI are easing, the broader trend remains constructive.
Meanwhile, the ECB has maintained a cautious tone, with President Lagarde reiterating that current rates are “sufficiently restrictive” but that the central bank remains data-dependent. Eurozone inflation continues to cool, but growth remains fragile, limiting the room for ECB to maneuver and keeping the upside of euro in check.
Such policy divergence has contributed to choppy price action in EUR/USD, with neither side offering a decisive catalyst for a breakout.
Technical Analysis: EUR/USD
EUR/USD remains in a bullish consolidation phase, with price action favoring tactical accumulation near support.
- Support: 1.1575, followed by 1.1500 and 1.1460
- Resistance: 1.1655, followed by 1.1675 if support holds
- Bullish Bias: Buy dips near 1.1575, targetting 1.1655 and 1.1675. Maintain stops below 1.1500.
- Bearish Setup: Short only if price breaks and holds below 1.1500, targetting1.1460. Use tight stops above 1.1575.
- Range Play: Buy near 1.1575 and sell near 1.1675. Trade the range until a breakout confirms direction.
Momentum Slows Although Structure is Intact
With the Fed signaling patience and the ECB staying cautious, EUR/USD is likely to remain range-bound in the near term. The bullish structure remains intact while above 1.1500, but momentum is fading. Traders should watch for fresh macro catalysts including U.S. inflation data and ECB commentary to determine whether the pair can break above 1.1675 or slip into a deeper correction.
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