CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

EURUSD, DXY Forecast: US CPI and 2025 Trends

Article By: ,  Market Analyst
December 11, 2024 8:43 AM

Key Events:

  • US Dollar Index (DXY): Holding above key support; potential for a 2025 rally remains
  • EURUSD: Rebounding above 1.04; parity risks on hold
  • US CPI: Core, m/m, y/y data due today
  • ECB Rate Decision: Scheduled for Thursday
  • Market Anticipation: Upcoming FOMC and BOJ meetings in focus

The current market consensus leans towards a slight uptick in monthly and yearly US inflation levels, a final 25 bp Fed rate cut in December, and elevated inflation risks for 2025. This aligns with expectations for a gradual decline in the pace of the monetary easing cycle, supporting the US Dollar alongside haven demand amid rising geopolitical uncertainties ahead of 2025.

Amid holiday volatility and heightened 2025 uncertainties, markets are hovering near extreme levels. EURUSD holds above the 1.04 support, DXY challenges the 107–108 resistance zone, and indices are pausing below record highs.

Central banks are setting their armors ahead of a Trump presidency in 2025, with his vows to implement drastic policies as soon as the term begins, between trade and political wars.

Technical Analysis: Quantifying Uncertainties

US Dollar Index Forecast: Monthly Time Frame - Log Scale

 

Source: Tradingview

Following the US Dollar’s primary uptrend since 2008, the current trend remains aligned within the mid-channel zone, supported by a rebounding RSI from the neutral 50 zone and a respected time cycle low.

While the broader outlook leans bullish, confirmation of the uptrend requires a decisive break above the 2023–2024 bearish channel and the 108-resistance zone. Such a move could push the DXY toward the channel’s upper boundary at 110.40 and 114, with a potential extension to the 120-resistance level.

A failure to break the upper border can trap the DXY movement back inside the yearlong bearish channel, between the 103 and 100 support zones.

US Dollar Index Forecast: 3Day Time Frame - Log Scale

 

Source: Tradingview

Zooming in, the DXY is retesting the upper boundary of the bearish channel, stretching from October 2023 highs to November 2024 highs, at 105.40 support. A break below 105.40 could lead to a decline toward 104.70 and possibly align the trend with the mid-channel at 103.

EURUSD Forecast: Monthly Time Frame - Log Scale

Source: Tradingview

Unlike the DXY, EURUSD remains far from the mid-channel zone of its primary downtrend from the 2008 highs. Bearish pressures dominate, with a break below 1.04 required to confirm further declines toward parity at 1.017 and 0.98.

On the upside, a firm break above 1.13 is necessary to extend the euro’s rally and challenge the primary downtrend, eyeing resistance at 1.15 and 1.2.

EURUSD Forecast: 3Day Time Frame - Log Scale

Source: Tradingview

Zooming in, EURUSD is holding above 1.04 support, a flag pattern target, and may be forming an inverted head-and-shoulders pattern as the RSI-14 rebounds from oversold levels last seen in October 2023. If the support holds and the reversal pattern is confirmed, EURUSD could revisit resistance at 1.07 and 1.0780, aligning with the flag pattern’s lower boundary. Breaking above 1.08 could extend the rally to 1.0870 and 1.0940. Downside risks as previously mentioned include a break below 1.04 and 1.033, which could push the pair toward 1.017 and 0.98.

--- Written by Razan Hilal, CMT on X: @Rh_waves and Forex.com You Tube

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2025