Fundamental Overview
Overall, we’ve seen a rangebound price action in the US Dollar this week as the market’s pricing remained largely unchanged due to the lack of catalysts at three rate cuts by the end of 2025.
This morning, we saw some strong bids in the greenback entirely due to the weak Eurozone PMIs as the flows in the pair spilled over to other markets.
On the EUR side, the probabilities for a 50 bps cut in December rose to 63% from 26% before the PMIs. By the end of 2025, the market sees a total of 142 bps of easing.
EURUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that EURUSD broke through the key support zone around the 1.05 handle yesterday and extended the drop into the 1.0335 level this morning on weak Eurozone PMIs.
From a risk management perspective, the sellers will have a better risk to reward setup around the previous support now turned resistance. The buyers, on the other hand, will want to see the price rising back above the 1.05 handle to invalidate the bearish setup and position for a rally into the major trendline.
EURUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have another downward trendline now defining the current bearish momentum. If we were to get a pullback, the sellers will likely lean on it to position for a drop into new lows, while the buyers will look for a break higher to pile in for a rally into the major trendline.
EURUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor resistance zone around the 1.06 handle. This is where the sellers keep on stepping in to target the break below the 1.05 handle. The buyers, on the other hand, will need the price to break higher to start targeting new highs. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the US PMIs.
