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
EURUSD Daily
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
EURUSD 4 hour
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
EURUSD 1 hour
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.