EUR/USD, Oil Forecast: Two trades to watch

EUR/USD struggles below 1.0550 as headwinds mount

Russian-Ukraine tension & Trump trade tariff concerns weigh
Eurozone consumer confidence & US jobless claims
EUR/USD falls towards 1.05

EUER/USD is falling for a third straight session as the market mood sours amid concerns over rising geopolitical tensions between Russia and Ukraine and worries regarding possible US tariffs on the EU under the Trump administration. ECB-Fed monetary policy divergence keeps pressure on EUR/USD.

ECB policymaker Francois Villeroy de Galhau said that the balance of risks to inflation is shifting to the downside and that the ECB should continue to ease monetary policy. These comments support the view that the ECB will continue cutting rates with a 25 basis point rate reduction expected in December.

Looking ahead, attention will be on eurozone consumer confidence data, which is expected to improve modestly to -12.4, up from -12.5.

ECB chief economist Philip Lane is also due to speak.

Meanwhile, the US dollar is holding steady on Thursday after booking solid gains yesterday. The market awaits further clarity on the outlook for Trump's proposed policies and amid expectations of less aggressive rate cuts from the Federal Reserve.

Less dovish comments from Federal Reserve officials have the market questioning a December rate cut. The market is pricing in a 54% possibility of a 25 basis point cut, down from 82% just a week ago. The market is also expecting fewer cuts in 2025 than expected a month ago due to the risk of higher inflation from Trump's policies.

Today, attention will be on US jobless claims and existing home sales for further clues into the health of the US economy.

EUR/USD forecast – technical analysis

Failure to rise above 1.06 keeps bears in control of EUR/USD. Sellers supported by the RSI below 50 will look to take out 1.05 to extend losses towards 1.0450, the 2023 low. Below, the 1.04 round number comes into play.

Any recovery would need to rise above 1.06, the April low, and 1.0670 to negate the near-term selloff and bring 1.07 into play.

Oil rises amid escalating geopolitical tensions.

Russia – Ukraine geopolitical tensions rise.
Oil inventories rise by more than expected
Oil rises towards 70.00

Oil prices are heading higher after small losses yesterday, as concerns over geopolitical tensions between Russia and Ukraine overshadowed the impact of a larger-than-expected increase in crude oil inventories.

Ukraine fired more missiles into Russia using Western weapons. Russia had said that the use of Western weapons to strike Russian territory would mark a significant escalation in the conflict. While Russian oil exports aren't being impacted, this could change quickly should Ukraine target Russian energy infrastructure.

The other risk is how Russia could respond after Russian President Putin lowered the threshold for a nuclear response earlier this week.

Norway's Equinor oilfield has fully restored output and is back online, recovering from a power outage in its North Sea oil field earlier in the week.

On the demand side, US crude and inventories rose by 545k barrels in the week ending November 15, ahead of the expected 138k barrel increase. Gasoline inventories rose by more than forecast while distillate stockpiles posted a larger-than-expected draw.

Looking ahead, OPEC+ could oppose the unwinding of voluntary production cuts when it meets on December 1st, given the weak global oil demand picture and concerns about a supply surplus next year. OPEC+ had planned to gradually reverse output cuts starting December and into 2025, although this has already been pushed back once.

Oil forecast – technical analysis

Oil has recovered from the weekly low of 66.5, heading towards 70k. The price continues to trade in a familiar holding pattern, capped on the upside by 71.50- 72.50 and by 67.50 on the downside.

Sellers will need to take out the 67.50 support zone to extend losses towards 65.50.

Buyers will need to break above the 71.50 – 72.50 zone to create a higher high and head towards 75.00.

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.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.

FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.

FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.

GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.