EUR/USD Outlook: Eyes on 1.0331 Low Amid Bearish Bias and Potential Recovery

EURUSD

Prediction: Likely to Rise

Fundamental Analysis:
EUR/USD extended its upward momentum on Wednesday, approaching the 1.0600 mark after consolidating modest gains from Tuesday. The pair strengthened as the US Dollar saw a sharp decline, driven by comments from President-elect Donald Trump about potential new tariffs on imports from China, Mexico, Canada, and the EU. Additionally, end-of-month portfolio adjustments contributed to the movement. On November 7, the Federal Reserve cut interest rates by 25 basis points to a range of 4.75%-5.00% as part of its efforts to bring inflation back to the 2% target. However, early signs of labor market stress are emerging despite persistently low unemployment rates.

Technical Analysis:
Should EUR/USD continue its downward trajectory, it may revisit its 2024 low of 1.0331 (November 22), with further potential targets at 1.0290 (November 30, 2022) and 1.0222 (November 21, 2022). On the upside, the 200-day Simple Moving Average (SMA) at 1.0857 serves as the first resistance level, followed by the 55-day SMA at 1.0860 and the November high of 1.0936 (November 6). The short-term outlook remains bearish while the pair trades below the 200-day SMA. However, the 4-hour chart suggests a moderate recovery is possible, with immediate resistance at 1.0584, followed by 1.0609 and 1.0653. Downside targets remain at 1.0331 and 1.0290. The RSI has risen to 62, signaling improving momentum.

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