EUR/USD Price Analysis – Nov 25, 2024
Daily Price Outlook
The EUR/USD currency pair has regained some of its earlier bullish momentum, holding steady around the 1.0492 mark and even reaching an intra-day high of 1.0501. This comes despite the mixed results from the German IFO survey.
However, the recent bearish trend in the pair can be linked to a weakening US dollar, which has lost some ground due to technical factors. The US Dollar Index (DXY), a key measure of the dollar’s strength against other major currencies, dropped to around 107.00 after peaking at a two-year high of 108.07 on Friday.
Looking ahead, the shared currency remains on shaky ground, as market uncertainty grows. However, the potential appointment of Scott Bessent as Treasury Secretary has sparked concerns, with investors fearing that his selection could lead to tariff hikes, escalating into a global trade war. Such measures would likely hurt the already fragile Eurozone economy, particularly its export sector, adding pressure on the euro.
EUR/USD Recovers Amid Weaker US Dollar and Mixed Eurozone Data
Market traders are closely monitoring the EUR/USD pair, which is recovering some of its lost ground. It recently climbed to an intra-day high of 1.0501, supported by a weaker US dollar. The US Dollar Index (DXY) has dropped to around 107.00 after reaching a two-year high of 108.07, providing relief for the euro.
However, concerns linger over potential US tariff hikes under Scott Bessent, whose expected appointment as Treasury Secretary has fueled fears of a global trade war.
European Central Bank (ECB) Chief Economist Philip Lane has warned that such measures could significantly disrupt the Eurozone economy.
Recent data from Europe paints a mixed picture. Germany’s IFO Business Sentiment Index for November showed a slight decline in business morale, while expectations for the next six months held relatively steady.
Meanwhile, the Flash PMI data for November revealed continued challenges, with both the services and manufacturing sectors contracting.
New orders have now declined for six straight months, creating a stagflationary environment, according to analysts. Despite this, the euro has shown resilience, recovering from earlier lows.
ECB Chief Economist Philip Lane added to the positive sentiment by suggesting that inflation control could be achieved next year, making restrictive policies unnecessary afterward. This outlook, combined with the euro’s current recovery momentum, gives traders cautious optimism for the EUR/USD’s near-term performance.
EUR/USD – Technical Analysis
The EUR/USD pair is trading at $1.04778, down 0.61%, as the dollar strengthens amid broader risk-off sentiment. The pair is holding below the pivot point at $1.05203, signaling further bearish potential. Immediate resistance stands at $1.04901, with key levels at $1.05625 and $1.06071 likely to act as significant barriers if the euro attempts a rebound.
On the downside, immediate support is at $1.03854, followed by stronger levels at $1.03489. A decisive break below $1.03854 could expose EUR/USD to further declines, potentially testing the $1.03400 area. The 50 EMA at $1.05197 is adding to selling pressure, reinforcing the bearish structure.
The RSI at 50 indicates neutral momentum, providing room for further moves in either direction. Traders are closely watching the $1.04893 entry point for potential short positions, with a target of $1.04366 and a stop loss at $1.05209.
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