The Euro (EUR) has demonstrated a noteworthy resurgence, currently challenging the highs of September 2025 around the 1.1920 mark. This surge comes amid a weakening US Dollar, influenced by trade uncertainties and rising political tensions domestically.
Factors Behind the Euro’s Surge
- Uncertainty in US trade policies is impacting the strength of the Greenback.
- Expectations of further easing from the Federal Reserve (Fed) are gaining traction.
- The possibility of a government shutdown in the United States adds to these woes.
Current US Trade Challenges
The US President has announced an increase in tariffs on South Korea from 15% to 25% due to non-compliance with trade agreement terms. This decision has contributed to apprehensions regarding US trade policies, weighed down the Dollar, and sparked concerns over its recovery.
On the ground, the Senate Democrats are poised to block a government funding bill unless strict measures are imposed on the current administration’s immigration policies, risking a partial shutdown that could further weaken the US Dollar.
Market Reactions and Economic Indicators
As global markets react to these developments, Asian markets appear unfazed, with the South Korean Kospi Index gaining 2.75%. However, the overall sentiment reflects considerable uncertainty regarding international trade.
The economic landscape reveals that US Durable Goods Orders surged by 5.3% in November, significantly outpacing the expected 0.5% increase. However, despite this positive data, the US Dollar remains largely unaffected.
Consumer Confidence Insights
Attention now turns to the Consumer Confidence index, which is set to provide essential insights into US economic conditions. This index gauges consumer sentiment, which is crucial for understanding potential spending trends in the economy.
Consumers’ willingness to spend is pivotal for the US economy, with high confidence generally benefitting the USD. However, any indications of lower consumer confidence could be detrimental.
Technical Analysis of EUR/USD
The EUR/USD pair continues to exhibit a bullish trend, testing crucial resistance at the 1.1920 level. Technical indicators suggest a potential bullish continuation, with the 4-hour Moving Average Convergence Divergence (MACD) indicating increasing momentum.
A decisive break above the September 2025 high of 1.1918 could shift market focus toward the significant psychological level of 1.2000. Conversely, a bearish reaction might find support around 1.1830, with additional support near 1.1725.
Upcoming Events
The market is awaiting further guidance from key economic events, including the Fed’s monetary policy decision expected on Wednesday. Analysts anticipate that the Fed may maintain the current interest rate range between 3.50% and 3.75%.
The speeches from European Central Bank President Christine Lagarde and Bundesbank President Joachim Nagel will also be scrutinized for insights into Europe’s economic outlook.
