EUR/USD Price Forecast - Pairs Holds 1.1765 as Fed Minutes Put 1.18 Breakout and 1.17 Support in Play

EUR/USD: Fed Minutes, 1.17–1.19 Range And Buy-The-Dip Setup

Macro backdrop for EUR/USD and shifting Fed–ECB expectations

EUR/USD is trading around 1.1765–1.1770, stabilizing after a four-day slide as the Dollar pauses and liquidity thins into year-end. The core driver is policy repricing. The Fed has already delivered a full 75 bps easing cycle in 2025, cutting by 25 bps in December and bringing the target range down to 3.50%–3.75%. That move locked in the idea that the Fed is in an easing phase, but not an aggressive one.
Futures now price a very high chance that nothing happens in January. The probability of no change at the next meeting has climbed to about 83.9%, while odds of another 25 bps cut have dropped to roughly 16.1%. A week ago the cut probability was closer to 20%. That shift removes the most dovish tail, limits fresh downside in the Dollar, but does not rebuild a bullish USD trend.
On the Euro side, the ECB kept rates unchanged in December and made it clear that future moves depend on data. That stance is less dovish than a Fed that has already cut three times this year. The net result is a narrowing policy gap that structurally supports EUR/USD on dips, even if short-term flows still chase the Dollar whenever yields pop or risk sentiment sours. The pair is therefore trapped between a “softening” Fed and a cautious ECB, with 1.17–1.18 acting as the battlefield as traders wait for the FOMC minutes to define the next push.

US Dollar index near 98 and what it means for EUR/USD direction

The broader Dollar picture explains why EUR/USD is stuck instead of trending. The DXY is hovering near 98.0, having rejected the 98.70–98.75 area and pulling back but still holding key retracement levels. The first important support band is the 0.236 Fibonacci zone near 97.98, and above that sits the 0.382 area around 98.13, now acting as the first real ceiling on a rebound.
If DXY pushes through roughly 98.25, upside opens toward 98.60. That type of break would almost certainly cap EUR/USD and drag it back toward 1.1700 or below. If instead the index slips under 97.75, Dollar bulls lose control and the door opens for EUR/USD to attack and clear the 1.1805–1.1810 band.
Until the minutes hit the tape, this leaves EUR/USD locked in a correlation box: as long as DXY oscillates inside 97.75–98.60, EUR/USD is likely to churn inside roughly 1.1700–1.1850, with only noise outside those levels rather than a clean trend.

Technical structure for EUR/USD: ascending channel and decisive levels

Technically, EUR/USD is consolidating inside a bullish structure, not breaking down. On the 2- to 4-hour charts, price is still trading inside an ascending channel that started in early December. The pair now sits just above the rising trendline, which aligns with the near-term moving averages.
The first key support is the 50-period EMA, clustered around 1.1750–1.1755. Each dip toward that EMA has attracted buyers, which is exactly how a healthy bull channel behaves. Deeper support comes from the 200-period EMA between 1.1700–1.1725. That zone has been the last “line of defense” for bulls this month.
Below the averages, a flat horizontal shelf at 1.1700 defines where the bullish narrative starts to crack. As long as daily closes hold above 1.1700, the price action is that of a trend pause rather than a reversal. A decisive daily close under that level would flip the structure into a more bearish regime and invite talk of a move back into the mid-1.16s.
On the topside, the market has repeatedly failed in the 1.1785–1.1810 band. The upper edge around 1.1805–1.1810 is the real breakout trigger. A clean punch through that region opens 1.1850 as the first target, followed by 1.1875. If momentum and macro stay supportive, a later extension toward the low 1.19s becomes realistic.
Momentum indicators back the consolidation narrative. On intraday timeframes the RSI is sitting near 50–52, neutral and balanced, not signaling exhaustion. On the daily chart, momentum has cooled from prior highs without forming a major bearish divergence, which keeps the door open for another leg higher if the fundamental catalyst lines up.

Geopolitics, risk sentiment and their impact on EUR vs USD flows

Macro and geopolitics are still skewed in favor of the US Dollar whenever fear spikes. Ongoing tension around Russia and Ukraine continues to cap Euro upside, as any escalation tends to send capital back into US assets and into USD cash. That safe-haven premium helps DXY stay bid even as US yields drift lower in response to the Fed’s 3.50%–3.75% policy range.
However, the Euro is not as fragile as it was in previous crises. The worst of the energy shock has moderated, and core fragmentation risk in the Eurozone is less acute than in prior cycles. Combined with an ECB that has not yet joined the Fed in cutting rates, that gives the single currency a structural backstop on dips.
The net effect for EUR/USD near 1.1765–1.1770 is a balance of forces. Global risk shocks and flight-to-quality flows still favor the Dollar. Policy divergence and a less aggressive ECB favor the Euro on medium-term horizons. Until one side gains a clear edge, the pair will trade the range and react more to intraday shifts in yields and headlines than to any single one-direction macro story.

Short-term EUR/USD trading map: supports, resistances and breakout triggers

The tactical map is defined by a narrow but clear set of levels. On the downside, immediate support sits at 1.1750–1.1755, where the 50-EMA and recent intraday lows overlap. A break and close below that band would expose the deeper support region at 1.1705–1.1725, where the 200-EMA and recent inflection points cluster. Under that, the round 1.1700 level is the pivot that separates a healthy bull correction from the start of a more meaningful downturn.
On the topside, resistance has been thick between 1.1785–1.1810. The upper strip at 1.1805–1.1810 has rejected several pushes, making it the key breakout threshold. Above that, upside targets line up at 1.1850 first and 1.1875 next, matching prior reaction highs and measured extensions from the channel. A move into that zone would almost certainly require a dovish-leaning read of the FOMC minutes or a softer-than-feared Dollar reaction to the text.
Because volatility has compressed and the RSI is neutral, EUR/USD is primed for a range expansion once the minutes remove uncertainty. Until then, the most rational view is that 1.1700–1.1810 is the active range, with sharp but contained swings inside it rather than a lasting breakout.

Strategy stance on EUR/USD: bullish bias, buy dips while 1.1700 holds

Putting the pieces together, the balance of evidence supports a bullish bias on EUR/USD, not a flat one. The Fed has already delivered 75 bps of cuts and sits at 3.50%–3.75%. The ECB has not followed. The Dollar index is capped below 98.60. The pair is holding an ascending channel, respecting support at 1.1750 and 1.1700, and momentum has reset from overbought levels without breaking the trend.
That mix argues for buying dips rather than selling strength while the 1.1700–1.1725 area holds on closing basis. Pullbacks into 1.1750 or even down toward 1.1705 are better framed as entry zones for longs targeting a medium-term move into 1.1850–1.1875, with scope for 1.19+ if the Fed minutes tilt dovish for 2026 or US data continues to cool faster than Eurozone numbers.
A conservative approach is to wait for a clean break above about 1.1810 and then aim for 1.1850–1.1875, with risk controlled below 1.1750. A more aggressive stance is to build positions inside 1.1750–1.1725, with a hard stop under 1.1700 and a target structure skewed to the upside. Only a decisive daily close below 1.1700, especially if DXY pushes through 98.60, would invalidate the buy-the-dip view and flip EUR/USD into a sell-on-rallies market with downside risk back toward the mid-1.16s.

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