EUR/USD holds $1.16 as traders await U.S. jobs data and pressure builds around key trendline

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EUR/USD holds $1.16

Highlights

- EUR/USD holds $1.16 ahead of U.S. NFP release as volatility remains muted.

- Pair trades inside major Fibonacci band, with resistance at $1.165–$1.168.

- Expectations for a December Fed rate cut fall from 62% to 43%, lending support to the dollar.

The structure reflects a market waiting for catalysts. EUR/USD continues to rotate between familiar retracement zones while buyers attempt to defend support around the 20-day EMA. Without a breakout above recent highs, the pair remains directionless as traders look to Thursday’s data for clarity.

Technical picture shows EUR/USD trapped inside key retracement structure

The pair is currently operating inside a broad Fibonacci value band spanning the 0.382 to 0.618 retracement levels drawn from $1.1184 to $1.1822. Last week’s rejection between $1.165 and $1.168 aligned precisely with the 0.618 retracement, reinforcing a heavy supply layer overhead. Sellers continue to defend that band, keeping bullish attempts capped.

EUR/USD price dynamics (Source: TradingView)

On the downside, price sits above the 20-day EMA near $1.159, a level that preserved support during earlier pullbacks. A break below that average would signal a loss of momentum and lift downside risk toward $1.154, the next structural support. Below that, deeper floors sit at $1.14 and $1.134, both of which anchored consolidations during the summer months.

Although EUR/USD broke out of October’s falling wedge — a structure that often precedes upside extension — it still trades below a broader descending trendline drawn from the $1.1818 peak. That trendline remains the primary obstacle to recovery. The pair faces layered resistance at the 50-day EMA near $1.162, followed by $1.168, and then $1.172, the mid-October high that serves as a major breakout trigger. Without a daily close above these zones, each bounce risks turning into a corrective move rather than a sustained trend shift.

Momentum signals reinforce this neutrality. The RSI has stabilized around 55, showing neither bullish acceleration nor bearish breakdown. Buyers have repeatedly failed to push momentum above 60, while sellers have been unable to drag the indicator beneath 40. This rangebound behavior mirrors the broader FX market, which has been cautious and highly responsive to incoming macro data.

Macro shifts and policy expectations shape the next move

Expectations of a December Federal Reserve rate cut have faded from 62 percent to 43 percent, offering modest support to the dollar and limiting immediate upside potential for EUR/USD. Fed Vice Chair Philip Jefferson’s remarks pointing to rising employment risks underscore that policymakers remain wary of easing too quickly. Markets now look to the NFP report for confirmation. A weak print could weaken the dollar and lift EUR/USD toward $1.168 and $1.172, while a strong report would push the pair toward $1.154.

Eurozone fundamentals provide little directional force. Most ECB policymakers have signaled a preference for holding rates steady, leaving the bloc without a clear policy catalyst. As a result, the euro’s near-term trajectory hinges almost entirely on U.S. data and global risk sentiment.For now, EUR/USD sits at a decisive inflection point. Holding $1.16 preserves balance within the structure, allowing for potential retests of resistance if the dollar softens. Losing this support would shift momentum in favor of sellers and raise the risk of a move toward the lower summer range. Conversely, reclaiming $1.165 and securing a close above $1.172 would mark the first meaningful momentum shift in weeks.

Outlook as the pair awaits market-moving data

EUR/USD remains locked in a consolidation phase, awaiting confirmation from economic releases that could set the tone for the remainder of the week. The path ahead depends on whether U.S. labor data reinforces the dollar’s recent strength or revives expectations for earlier cuts. Until then, the pair is likely to remain rangebound, with traders focusing on how price reacts to the established support and resistance layers.

In earlier analysis, we highlighted the euro’s difficulty breaking above the descending trendline despite intermittent strength. Today’s price behavior continues to reflect that theme, with EUR/USD holding support but unable to escape the broader downtrend that has dominated since late September.

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