EUR/USD holds steady as dollar softens and traders watch key resistance

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EUR/USD technical outlook

Highlights

- EUR/USD trades near 1.152 as the dollar extends its pullback.

- Fed cut bets approach 80 percent after dovish comments.

- Key resistance at 1.157 to 1.16 blocks upside momentum.

Comments from New York Fed President John Williams and Governor Christopher Waller revived expectations of an imminent policy adjustment, pushing market pricing for a 25bp cut close to 80 percent. With the dollar easing from multi-month highs and U.S. macro releases delayed until later in the week, EUR/USD now sits at what traders describe as a “critical inflection band.”

Technical pause at a major pivot

The daily chart shows price consolidating just above the 0.382 Fibonacci retracement at 1.153, a level that has repeatedly acted as a pivot through November. Buyers stepped in early this week to prevent a deeper slide toward the 1.142 support band near the 200-day EMA. As long as the pair remains above that area, downside momentum is contained even as the broader channel remains downward.

EUR/USD price dynamics (Source: TradingView)

EUR/USD continues to trade inside a declining structure that began at the 1.19 peak earlier in the year. The upper boundary of this channel sits near 1.162, forming the clearest line separating ongoing pressure from any meaningful bullish shift. The moving-average cluster reinforces this barrier: the 20-day EMA at 1.156, the 50-day EMA at 1.157, and the 100-day EMA at 1.16 have rejected every rebound for nearly two weeks.

Until buyers reclaim these levels, the trend favors rallies fading into supply rather than extending into a recovery.Momentum indicators show early improvement. RSI has recovered from 38 to 41, a sign of stabilization, though the reading remains far from the 50–55 zone that typically confirms bullish follow-through. The current rebound relies more on dollar softness than euro strength, leaving the pair vulnerable to renewed selling should resistance hold.

Macro divergence supports stabilization

The macro backdrop continues to provide short-term lift. The European Central Bank is expected to keep policy steady into next year, while markets have shifted sharply toward a December cut from the Fed. This divergence has softened dollar demand at the margin and allowed EUR/USD to defend the 1.15 region despite the lack of a structural breakout.

German Q3 GDP numbers and this week’s U.S. data — including PPI, retail sales, pending home sales and the Richmond Fed survey — form the next set of catalysts. Softer U.S. readings would reinforce the Fed’s dovish tilt and open room for EUR/USD to retest 1.157 to 1.16. Stronger numbers, however, could re-anchor yields and pull the pair back toward its lower support band.

The near-term focus now centers on whether EUR/USD can break above the 20-day EMA and clear the resistance zone stretching from 1.157 to 1.16. A daily close beyond this would unlock upside toward 1.166 and then 1.173, the next key Fibonacci cluster. Failure to hold 1.153 exposes a retest of 1.146, followed by the major structural floor at 1.142. Below that, the broader downtrend could accelerate, opening 1.138 as the next target.

For now, the pair sits at a technical crossroads, driven by policy expectations, dollar positioning and a narrow balance of macro catalysts.In earlier assessments, we noted that EUR/USD’s resilience depended on the dollar losing momentum and the pair defending the 1.15 floor. That dynamic remains intact, with stabilization emerging exactly at the expected support band. But the upside remains capped until buyers can reclaim the EMA cluster, keeping risk skewed to the downside unless the macro backdrop continues to soften.

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