🔍 Fundamental Overview
EUR/USD enters the final week of 2025 trading near 1.1770, supported by a resilient euro and a softening U.S. dollar environment. A steady ECB, declining U.S. yields, and increased expectations of additional Fed cuts in 2026 continue to underpin euro demand.
🇪🇺 Eurozone
• ECB Policy: The ECB maintains its main rate at 2.0%, signaling stability into mid 2026, which continues to support the euro.
• Economic Tone: Euro strength is underpinned by improved Eurozone growth signals and inflation trending near target levels. Markets interpret ECB restraint as a sign that the easing cycle is largely complete.
• Market Sentiment: A hawkish leaning ECB combined with muted recession fears has kept EUR/USD supported above mid December lows.
🇺🇸 United States
• Fed Policy: The Fed cut rates by 25 bps in December, bringing the federal funds range to 3.50–3.75%. Futures markets price two or more cuts in 2026, diverging from the Fed’s official projection of only one cut—this discrepancy weighs heavily on USD sentiment.
• Data Flow: Mixed macro readings—soft labor data and cooling inflation—continue to pressure the dollar. Traders increasingly focus on the Fed’s guidance rather than the ECB.
• Risk Tone: The dollar remains on the defensive as expectations of a 2026 easing cycle gain traction.

📊 Technical Analysis
Support Levels
• 1.1710 — Near term support
• 1.1650–1.1660 — Weekly support / buy zone region
• 1.1580 — Deeper downside target
Resistance Levels
• 1.1800 — Initial key resistance
• 1.1860 — Secondary resistance
• 1.2000 — Bullish breakout extension
Indicators
• MACD: Stabilizing near zero, showing early bullish momentum.
• RSI: Rising above 50, leaning bullish.
• Stochastic: Previously overbought, now easing—suggesting temporary corrective dips.
• 50-day MA: Price holding above key moving averages; staying above 1.1750–1.1800 is essential for continued bullish structure.

📈 Trading Scenarios
✅ Bullish Setup
• Entry: Above 1.1800 with sustained confirmation
• Targets:
o 1.1860
o 1.2000 (extension if USD weakens further)
• Stop Loss: Below 1.1710
• Catalysts:
o Fed dovish tone
o Weak U.S. data
o ECB stability / no cut expectations
• Rationale: Bulls continue to defend higher lows; breakout above the psychological 1.18 level opens the door toward late December highs.

❌ Bearish Setup
• Entry: Below 1.1650–1.1660
• Targets:
o 1.1580
o 1.1500 (deeper extension if risk-off returns)
• Stop Loss: Above 1.1800
• Catalysts:
o Strong U.S. macro surprises
o Hawkish Fed commentary
o Weak Eurozone data or geopolitical risk
• Rationale: A failure to hold the weekly support zone would signal fading bullish momentum and invite broader correction.