The EUR/USD exchange rate is currently positioned at 1.0537, showcasing a bullish outlook in the near term. The pair has experienced a corrective advance, trading above the psychological level of 1.0500. Initially, during the Asian session, the currency pair faced some downward pressure following President-elect Donald Trump’s warning of potential tariffs. Specifically, he proposed an additional 10% tariff on China and a further 25% tariff on Mexico and Canada, negatively impacting market sentiment. As a result, the US Dollar gained strength while stock markets experienced declines. European equities were also under pressure, following similar trends observed in Asia. Despite the early dip to 1.0424, the EUR/USD pair reversed direction and is currently on the rise.
In terms of data, the Eurozone did not release any significant economic indicators. However, the American session is anticipated to present the Nonmember CB Consumer Confidence data, which is expected to show an improvement to 111.8 from the previous figure of 108.7. Additionally, the Federal Open Market Committee (FOMC) will release the minutes from its November meeting. During that meeting, the FOMC approved a cut of 25 basis points in the benchmark interest rate, reducing it to a target range of 4.50% – 4.75%, with unanimous support from policymakers.
From a technical perspective, the daily chart for the EUR/USD pair indicates a persistent correction to the upside. While technical indicators show upward momentum, they remain in negative territory, signaling that any sustained rally may be limited. Currently, the pair is positioned below all moving averages, with the 20 Simple Moving Average (SMA) trending downwards and located well below the 100 and 200 SMAs. Despite these long-term bearish indicators, in the near term, the pair appears set to continue its advance, supported by a flat 20 SMA around 1.0475. Technical indicators are also trending higher, having moved above their midlines. Resistance is expected around the 100 SMA, which lies at approximately 1.0630.
Support levels are identified at 1.0510, 1.0475, and 1.0425, while resistance levels are anticipated at 1.0560, 1.0600, and 1.0630.
