US Dollar Forecast: EUR/USD Attempts to Halt Five-Day Selloff

US Dollar Outlook: EUR/USD

EUR/USD attempts to halt a five-day selloff as it recovers from a fresh monthly low (1.0453), but the exchange rate may struggle to retain the rebound from the yearly low (1.0333) as it continues to carve a series of lower highs and lows.

US Dollar Forecast: EUR/USD Attempts to Halt Five-Day Selloff

EUR/USD may track the negative slope in the 50-Day SMA (1.0697) as it no longer trades within the opening range for December, and the weakness following the US election may persist as the exchange rate holds below the moving average.

Join David Song for the Weekly Fundamental Market Outlook webinar.

David provides a market overview and takes questions in real-time. Register Here

US Economic Calendar

Nevertheless, the Federal Reserve rate decision may sway EUR/USD as the central bank is expected to cut US interest rates by another 25bp at its last meeting for 2024, and more of the same from the Federal Open Market Committee (FOMC) may drag on the US Dollar as Chairman Jerome Powell and Co. pursue a netural stance.

With that said, EUR/USD may trade within the November range should the FOMC stay on track to further unwind its restricitve policy in 2025, but the Fed’s Summary of Economic Projections (SEP) may generate a bullish reaction in the Greenback if the update reveals an upward revision in the interest rate dot-plot.

EUR/USD Chart – Daily

Chart Prepared by David Song, Strategist; EUR/USD on TradingView

EUR/USD fails to hold within the opening range for December as it carves a series of lower highs and lows, with a break/close below the 1.0448 (2023 low) to 1.0480 (100% Fibonacci extension) zone raising the scope for a move towards 1.0370 (38.2% Fibonacci extension).
A breach below the yearly low (1.0333) opens up 1.0200 (23.6% Fibonacci retracement), but lack of momentum to break/close below the 1.0448 (2023 low) to 1.0480 (100% Fibonacci extension) zone may keep EUR/USD within the November range.
Need a close above the 1.0580 (78.6% Fibonacci extension) to 1.0610 (38.2% Fibonacci retracement) region to bring 1.0660 (61.8% Fibonacci extension) back on the radar, with the next area of interest coming in around 1.0710 (50% Fibonacci extension).

Additional Market Outlooks

USD/JPY Stages Five-Day Rally for First Time Since June

Gold Price Forecast: Bullion Remains Below Pre-US Election Prices

Canadian Dollar Forecast: USD/CAD Climbs to Fresh Yearly High

GBP/USD Outlook Hinges on Break of December Opening Range

--- Written by David Song, Senior Strategist

Follow on Twitter at @DavidJSong

The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.