EUR/USD Price Forecast - Eur Holds Around 1.17 As Fed Cut And Euro Tests Multi-Month Resistance

EUR/USD Price: Euro Tests 1.17 Resistance As Dollar Weakens And Central Banks Diverge

Spot EUR/USD Around 1.17 – What Actually Happened This Week

EUR/USD spent the week pressing into a heavy resistance band and finished sitting just below the upper edge. The pair opened around 1.1640 and closed near 1.1743, with intra-week highs roughly at 1.1762. That leaves about a 0.88% gain on the week and a clear test of the 1.1686–1.1748 Fibonacci zone that has blocked the pair for almost five months. Shorter-term data show EUR/USD at 1.17456 with only about a 0.25% decline over the last three months, meaning the pullbacks have been shallow relative to the recent recovery. At the same time, a very short-horizon signal still flashes “buy,” which fits the current pattern of higher highs and higher lows on the daily chart.

Dollar Side Of EUR/USD – Fed Cut, Softer Data And A 9% Yearly Slide

On the USD leg, the story is straightforward: the Federal Reserve delivered another 25-basis-point cut and the dollar sold off instead of bouncing. The broad dollar index is now down roughly 9% year to date, a sign that the “US exceptionalism” premium has been eroding for months rather than days. The key shift is not just the latest cut itself, but the market’s conviction that the Fed is now firmly in an easing phase while other major central banks are not rushing to follow. Add in weaker US releases, including softer labor indicators and patchy activity data, and the USD has been losing yield advantage exactly as EUR/USD pushes into resistance. That macro backdrop is what allowed the pair to break away from the low-1.16 handle and attack the 1.17s even though US yields have not fully collapsed.

ECB Stance And EUR Fundamentals – “Good Place” Policy With A Resilient Economy

The EUR leg is not just riding dollar weakness; it is being supported by central bank communication and relative growth. Policy in the euro area is anchored with the deposit rate around 2%, and the central bank has been signalling that it sees its stance as “in a good place” instead of preparing an imminent easing cycle. Growth in the bloc has been described as close to potential rather than recessionary, and there is already discussion that future projections could be nudged higher. Economists’ surveys still point to no change in the policy rate at the upcoming meeting and, importantly, no aggressive cutting cycle through 2026. That means EUR/USD is trading in an environment where the Fed is already easing and the ECB is sitting tight, which mechanically narrows the rate spread in favor of the euro. On top of that, the EUR is already up roughly 13% this year on a trade-weighted basis, showing that strength is broad, not only against the USD.

Euro Trust ETF Flow Signal – FXE Outflow Versus A Short-Term EUR/USD Buy

On the listed product side, the Invesco CurrencyShares Euro Trust (FXE) recorded an outflow of about 5,363,500 USD on December 9, equal to roughly 1.22% of its 439,425,000 USD in assets under management. That is a material but not dramatic reduction. It looks more like a tactical trim than a wholesale exit from euro exposure. At the same time, price action in EUR/USD does not match a panic unwind: the pair is trading at 1.17456, with a modest 0.25% three-month dip and a one-day technical stance still on “buy.” The combination suggests that some investors are banking profits in the ETF after the euro’s strong year, while spot traders still see upside risk as long as the pair holds above the key supports. For positioning, an ETF outflow of barely over 1% of AUM is a mild warning, not a structural vote against the EUR.

*Cross-Check: EUR Strength In EUR/JPY And EUR/GBP, Not Just Versus USD

Crosses confirm that euro strength is not isolated to EUR/USD. In EUR/JPY, the pair has pushed into fresh all-time highs, breaking through 182.00 and then stair-stepping via psychological levels: 182.00 flipped from resistance to support, 182.50 became the next ceiling, and then prices extended toward 183.00. That kind of pattern only happens when buyers are in firm control across sessions. With the Bank of Japan still running ultra-loose policy and markets watching the next rate decision closely, the euro’s ability to hold near those historic levels underscores demand for EUR far beyond the dollar story. In EUR/GBP, there was a pullback after a three-year high, but recent sessions saw recovery as buyers stepped back in and defended the 0.8738–0.8753 zone. At the same time, GBP/USD is trading in the mid-1.33s after hitting around 1.34225 on the Fed cut, then fading. That pattern – euro firm versus pound, pound only modestly stronger versus dollar – reinforces a simple message: the euro is the relatively strong leg in many major pairs, not just EUR/USD.

Macro Divergence Inside EUR/USD – Fed Easing Versus ECB Patience

The macro spread that matters for EUR/USD is not just today’s interest-rate print; it is the projected path. On the US side, the central bank has already cut three times in this cycle and markets are debating how many more cuts arrive in 2026. A divided vote at the last meeting and a run of softer data pushed investors to price a slower economy and more accommodative policy. That erodes the USD carry argument. On the euro side, surveys of 96 economists show a clean consensus: no change at the next meeting and a long hold near 2% through much of 2026. There is even noise from individual officials hinting that the next move could be up, not down, if inflation or growth reaccelerate. The result is a forward-looking curve where EUR rates look comparatively sticky while USD rates are sliding. For EUR/USD, that sort of curve configuration historically supports levels above where spot is now, especially when the dollar index is already down around 9% on the year.

UK And BoE Context Around EUR/USD – Why EUR Is Beating GBP

The pound side of the story matters because it highlights that the euro is not just “another anti-dollar.” GBP/USD started the recent leg near 1.30250 on November 21, then spiked to around 1.34225 after the Fed cut before pulling back. Into the latest week, the pair traded roughly 1.33085 to 1.34590, closing near 1.3373. At the same time, the pound weakened against the euro: GBP/EUR slipped from about 1.1448 to around 1.1388, a move of roughly −0.52% on the week. The macro backdrop explains that divergence. UK output fell about 0.1% month-on-month in October and also dropped 0.1% over the August–October period. Inflation is still elevated, with year-on-year CPI around 3.50% expected, but growth is softer and markets are convinced the Bank of England will cut by 25 basis points to around 3.75% at the coming meeting. That means the pound is facing both weaker growth and imminent easing, while the euro has resilient growth and a central bank on hold. For EUR/USD, the implication is clear: when one European currency has softer fundamentals, the euro looks increasingly like the “quality” European leg against the USD.

Short-Term Technical Map For EUR/USD – Range, Supports And Breakout Line

Technically, EUR/USD is pressing exactly where it should struggle: the 1.1686–1.1748 Fibonacci resistance zone. That band has capped upside attempts since the start of Q3, repeatedly sending the pair back into the mid-1.15s and low-1.16s. This week, 1.1748 once again acted as the ceiling, with both Thursday and Friday highs failing just under that level. At the same time, the daily structure has turned constructive: price is printing higher highs and higher lows, and the weekly close around 1.1743 is near the upper end of the entire recent range. The key downside reference is the 1.1686 Fibonacci level, which now acts as first support, followed by the prior swing low at 1.1613. As long as EUR/USD stays above 1.1613 on a daily closing basis, the bullish structure remains intact. A clean daily and weekly close above 1.1748 would signal a breakout and likely open room toward 1.1850–1.1950 as the next medium-term resistance zone, with 1.2000 as the obvious psychological magnet beyond that.

Event Risk Cluster For EUR/USD – Jobs, CPI, ECB And BoE In One Week

The event calendar is loaded and it matters directly for EUR/USD pricing. Shut-down-delayed US macro releases land almost back-to-back: November jobs and retail sales are due early in the week, followed by November CPI later in the week. Consensus expects flat hiring in October data, a modest 50,000 increase in November, and unemployment drifting toward 4.5%. On inflation, projections center on a cumulative 0.5% rise over the two missing months and an annual rate around 3.1%. Any upside surprise would challenge the current dovish interpretation of the Fed and could trigger a sharp bounce in the USD. On the European side, both the ECB and BoE decisions land on Thursday, December 18. For the euro, the base case is a hold at 2% and “no rush” messaging. For sterling, the base case is a 25-basis-point cut to around 3.75%. The combination of a likely BoE cut, an ECB on hold and a Fed already easing creates a three-way rate story where EUR/USD is highly sensitive to any deviation in US data and any shift in ECB tone. Thin pre-holiday liquidity into Christmas increases the probability that even small surprises can trigger outsized intraday swings.

Scenario Analysis For EUR/USD – Paths For Bulls And Bears

The bullish path for EUR/USD is led by data that confirm a cooling US economy without re-accelerating inflation. If jobs and CPI come in at or below expectations, markets will keep pricing additional Fed easing in 2026, US yields can drift lower, and the dollar has room to weaken further. Under that setup, the 1.1686–1.1748 resistance band is likely to break, and once 1.1748 is cleared on a weekly close, the pair can extend toward the 1.1850–1.1950 zone, with 1.2000 back in play over the following weeks. Euro-side support from an ECB that reiterates the “good place” narrative and upgrades growth projections would reinforce that move, especially with EUR/JPY already at record highs and EUR/GBP recovering. The bearish path rests on a different combination: stronger-than-expected US CPI or payrolls that revive a “higher for longer” debate and put upward pressure on yields, combined with unexpectedly cautious or dovish language from the ECB. In that case, EUR/USD can fail again at 1.1748, slip back through 1.1686, and test 1.1613. A daily close below 1.1613 would turn the structure from constructive to vulnerable and open space toward the mid-1.15s. Given the euro’s strong performance this year and the recent 5,363,500 USD outflow from FXE, that downside scenario would likely be framed as a positioning clean-up rather than a full trend reversal, but price will not care about the label.

Trading View On EUR/USD – Buy, Sell Or Hold At 1.17?

With spot around 1.17456, EUR/USD is trading exactly into the top of a five-month resistance band while the macro regime is quietly rotating in the euro’s favor. The Fed is already cutting, the dollar index is down about 9% on the year, and upcoming US data carry more downside risk for the USD narrative than upside unless inflation surprises meaningfully higher. The ECB is holding rates at roughly 2% with no immediate easing path, eurozone growth looks more resilient than it did a few quarters ago, and the euro is outperforming not just against the USD but also against the pound and the yen. ETF flows show some long-euro profit-taking but not a structural exodus, while short-term technical signals on the pair still point to the upside. The technical risk is that 1.1748 once again caps the move and forces a pullback to 1.1686 or even 1.1613. That argues against chasing aggressively at resistance. Putting all of that together, the stance on EUR/USD is Buy-biased, but best expressed as a Buy on pullbacks into the 1.1686–1.1613 support zone rather than at current levels. As long as the pair stays above 1.1613 on a closing basis, dips look like opportunities within an emerging euro-positive trend. If that level breaks, the bias shifts to neutral until price either reclaims the band or resets closer to the mid-1.15s.

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