Read the latest EUR/USD forecast as the pair holds near 1.1530. Analyze how German GDP, Fed rate cut expectations, and upcoming US Retail Sales data impact the Euro.
What is the current outlook for EUR/USD?
The EUR/USD forecast shows the pair consolidating around 1.1530, struggling to break immediate resistance at 1.1550. While German GDP avoided a recession, economic stagnation limits the Euro’s upside. Conversely, the US Dollar remains under pressure due to dovish Federal Reserve expectations, with markets pricing in an 80% chance of a rate cut in December.1
In Tuesday’s European session, the EUR/USD forecast remains a story of consolidation and caution. The major currency pair is showing mild gains, changing hands at 1.1530 at the time of writing, but buyers lack the conviction to push the price above the critical 1.1550 barrier.
While the US Dollar Index (DXY) has traded lower, providing some breathing room for the single currency, the Euro (EUR) has failed to capitalize significantly. Traders are caught between stagnant growth in the Eurozone and shifting monetary policy expectations in the United States.
All eyes now turn to the North American session, where delayed US retail sales and producer price indices (PPI) are expected to inject volatility into the markets.
German Economy: Stagnation Weighs on the Euro
Data released earlier on Tuesday confirmed that the Eurozone’s engine is sputtering. Germany’s Gross Domestic Product (GDP) confirmed preliminary estimates of 0% growth in the third quarter.2
While this technically avoids a recession—following a 0.3% decline in the second quarter—it paints a picture of an economy that is firmly gripped by stagnation.
Key German Economic Indicators
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GDP (Q3): 0% growth (Quarter-on-Quarter).3
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Year-on-Year Growth: Ticked up slightly to 0.3% (from 0.2% in Q2).
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IFO Business Climate (Nov): Fell to 88.1, missing expectations of 88.5.
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Economic Expectations: Worsened significantly, dropping to 90.6 from 91.6 in October.
This lack of economic momentum makes it difficult for the European Central Bank (ECB) to justify a hawkish stance, thereby limiting the Euro’s ability to rally against the Greenback.
Federal Reserve: The Case for a December Rate Cut
Across the Atlantic, the narrative driving the EUR/USD forecast is centered on the Federal Reserve’s next move. The US Dollar has retreated to the lower end of its recent trading range, weighed down by dovish commentary from key officials.
On Monday, Fed Governor Christopher Waller aligned himself with New York Fed President John Williams, calling for a quarter-point rate cut next month. Waller highlighted two critical factors:
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Available data points to a weakening labor market.
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Inflation is expected to continue moderating.
Market Probability Shifts
These comments have dramatically shifted investor sentiment. While the decision was previously viewed as a “toss-up” amid divergence among policymakers, the market is now pricing in aggressive easing.
According to the CME Group’s FedWatch Tool:
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Last Week: ~40% chance of a cut.
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Today: >80% chance of a 25 basis point rate cut on December 10.4
Geopolitics: Trump Stabilizes Asian Tensions
Beyond economics, geopolitical developments are influencing risk sentiment. US President Donald Trump took to social media on Monday to declare that relations with China are “extremely strong” following a phone call with President Xi Jinping.5
In a move to ease friction in Asia, Trump also held a call with Japanese Prime Minister Sanae Takaichi.6 These diplomatic efforts have slightly reduced demand for safe-haven assets, keeping the Dollar on the back foot and indirectly supporting riskier currencies like the Euro.7
Upcoming US Economic Data Catalysts
The immediate direction of the EUR/USD forecast will likely be decided later today. Investors are awaiting delayed macroeconomic data from the US, which could either validate or challenge the Fed’s dovish pivot.
1. US Producer Price Index (PPI) – September
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Headline PPI: Expected to rise to 0.3% MoM (recovering from -0.1% in August).
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Annual Inflation: Seen accelerating to 2.7% (from 2.6%).
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Core PPI: Expected to cool slightly to 2.7% YoY.
2. US Retail Sales – September
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Consensus: Growth of 0.4%, a slowdown from 0.6% in August.
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Ex-Auto Sales: Expected to fall to 0.4% (from 0.7%).
Market Implication: If Retail Sales come in weaker than expected, it will reinforce fears of a slowdown, likely hurting the USD and pushing EUR/USD toward 1.1600. Conversely, hot inflation data (PPI) could complicate the Fed’s path to a rate cut.
Technical Analysis: EUR/USD Trapped in “No Man’s Land”
From a technical perspective, the EUR/USD forecast remains neutral-to-bearish as long as price action stays below key resistance levels.
4-Hour Chart Overview
The pair is languishing near two-week lows in the 1.1500 area. While there have been upside attempts, the broader bearish trend remains in play.
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RSI (Relative Strength Index): Failed to consolidate above the 50 level, indicating weak buying momentum.
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MACD: Has crossed above the signal line but remains at sub-zero levels, underscoring the fragility of the recent recovery.
Key Support and Resistance Levels
| Level Type | Price Point | Significance |
| Resistance 1 | 1.1550 | Immediate cap; rejected bulls for 3 consecutive days. |
| Resistance 2 | 1.1600 | Nov 18-19 highs. |
| Resistance 3 | 1.1625 | Top of the descending channel from mid-October. |
| Support 1 | 1.1500 | Psychological support level. |
| Support 2 | 1.1470 | November 5 lows. |
| Support 3 | 1.1425 | Bottom of the descending channel. |
Trading Strategy: A clean break above 1.1550 is needed to confirm a bullish reversal targeting 1.1600. Conversely, a drop below 1.1500 would likely embolden bears to test the November lows at 1.1470.
Currency Heat Map: Euro Performance
The Euro has shown mixed performance against major peers today. While it struggles against the Dollar, it has found strength elsewhere.
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Strongest Against: New Zealand Dollar (NZD)
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Weakest Against: Japanese Yen (JPY)
Daily Percentage Changes:
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EUR/USD: +0.05%
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EUR/GBP: +0.00%
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EUR/JPY: +0.16%
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EUR/AUD: -0.34%
Frequently Asked Questions (FAQ)
1. Why is the EUR/USD pair struggling to rise?
The Euro is struggling due to weak economic growth in the Eurozone, specifically in Germany, which recorded 0% GDP growth in Q3.8 This economic stagnation limits the European Central Bank’s ability to raise rates, keeping the Euro weaker compared to the Dollar.
2. How does the US PPI data affect the EUR/USD forecast?
The Producer Price Index (PPI) measures inflation at the wholesale level.9 If PPI is higher than expected, it suggests inflation is sticky, which might force the Fed to keep rates high (bullish for USD, bearish for EUR). If PPI is lower, it supports a rate cut (bearish for USD, bullish for EUR).
3. Will the Federal Reserve cut rates in December?
Market expectations have risen significantly. Following dovish comments from Fed Governor Waller, the probability of a 25 basis point rate cut in December has jumped to over 80%, up from 40% last week.10
4. What is the key technical level to watch for EUR/USD?
The most critical level is 1.1550. The pair has failed to break this resistance for three days. A move above this could open the door to 1.1600, while a failure to break it could see the price drop back toward 1.1500 or 1.1470.
5. How do geopolitical tensions affect the currency pair?
Generally, geopolitical tension causes investors to flee to “safe-haven” currencies like the US Dollar.11 Recent comments from President Trump regarding strong ties with China and Japan have eased these tensions slightly, reducing safe-haven demand for the Dollar and helping the Euro stabilize.