FundamentalOverview

Last week, despite thehigher-than-expected inflation figures and a less dovish Powell, the US Dollarcouldn’t extend the gains. The market’s pricing remained largely unchanged atthree rate cuts by the end of 2025.

This might be a signal thatthe market is now fine with the current pricing, and we will need strongerreasons to price out the remaining rate cuts. This could open the door for somepullbacks and general US Dollar weakness.

On the EUR side, not muchhas changed although the probabilities for a 50 bps cut in December fell to 24%from 31% last week and a total of 139 bps of easing by the end of 2025. Thiscould turn out to be too much if the data picks up with the Eurozone Flash PMIson Friday in focus.

EURUSD TechnicalAnalysis – Daily Timeframe

On the daily chart, we cansee that EURUSD bounced from the key support zone around the 1.05 handle. That’s where thebuyers stepped in with a defined risk below the level to position for a rallyback into the major trendline.

The sellers, on the otherhand, will want to see the price breaking lower to increase the bearish betsinto new lows or wait for the price to reach the trendline to push into newlows with an even better risk to reward setup.

EURUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price recently broke above the downward trendline that wasdefining the bearish momentum on this timeframe. This might be a signal for abigger pullback. The buyers will want to see the price breaking above the 1.0682level to increase the bullish bets into the trendline, while the sellers willlikely lean on it to target the break below the 1.05 handle.

EURUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor resistance zone around the 1.06 handle. This is wherethe sellers keep on stepping in to target the break below the 1.05 handle. Thebuyers, on the other hand, will need the price to break higher to start targetingnew highs. The red lines define the average daily range for today.

UpcomingCatalysts

Thisweek is pretty empty on the data front with the most important releasesscheduled for the latter part of the week. On Thursday, we get the latest USJobless Claims figures, while on Friday we conclude the week with the Eurozoneand US Flash PMIs.