EUR/USD Price Forecast: Rallies fail above 1.1200 amid high Oil prices, debt woes
The Euro (EUR) is failing to capitalise on the moderate US Dollar (USD) weakness witnessed on Friday as the high Oil prices and the ongoing concerns about France’s public debt offset investors’ optimism about lower global yields. The EUR/USD pair treads water above 1.1200 ahead of the US session opening, halfway through the weekly trading range.
The US Dollar Index retreated on Thursday as a successful auction of US 30-year bonds eased concerns about government debt and sent long-term yields lower from multi-decade highs. The Euro, however, faces weaknesses of its own, as Brent prices remain above $100, threatening to tip Eurozone economies into stagflation, with French debt at historic highs and social unrest spreading across the country.
Earlier on Friday, St. Louis Fed President Alberto Musalem provided some support to the US Dollar, affirming that “more monetary policy will be needed” to bring inflation to the 2% target. Later on the day, the US Michigan Consumer Sentiment Index report might have some impact on US Dollar crosses, although the main focus remains on next week’s US Consumer Price Index (CPI) and Producer Price Index (PPI) figures, which might help to determine the timing of the Fed's next move.
Technical Indicators: Bearish momentum fades, but bulls do not show up
EUR/USD trades at 1.1214, keeping a bearish tone, on track to complete a 3.5% sell-off in a five-week losing streak. The 4-hour Relative Strength Index (14) remains capped below the 50 midline, while Moving Average Convergence Divergence (MACD) is marginally positive. These readings hint at stabilizing pressure, with bullish pressure still too weak to contemplate a bullish shift.
Price action is hovering halfway through the weekly horizontal channel, with immediate resistance at the October 2 and 8 highs around 1.1275. Further up, the next target emerges in the area between the late June lows at 1.1337 and the 38.2% Fibonacci retracement of the September-October downtrend, near 1.1350.
On the downside, immediate support emerges at the October 2 low, near 1.1160. Below here, the late May 2025 lows in the 1.1050 area emerge as a plausible target before the psychological 1.1000 level.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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