Technical Break Above Key Moving Averages Ignites Buying

Summary:

With the price now trading above both these key technical levels, bullish pressure is expected to accelerate toward levels not seen since September.

Buy EURUSD

EXP

PENDING

1.16450

ENTRY

1.18200

TGT

1.15600

1.17394 +0.00011 +0.01%

Point

PENDING

1.15600

CLOSING

1.16450

ENTRY

1.18200

TGT

Federal Reserve Chair Jerome Powell stated that the central bank is "well positioned" to "wait and see" how the economy evolves, following the 75 basis points (bps) of policy easing implemented this year. Powell elaborated that the Fed funds rate currently lies within the upper range of neutrality estimates. He added that policymakers will patiently await incoming economic data, which he noted could potentially be "distorted."

"After 175 basis points of cuts, we have moved our policy back to a level that is certainly not strongly restrictive right now," Powell said. "I believe it is in a neutral range." The accompanying Summary of Economic Projections (SEP) revealed the latest "dot plot," which showed that the majority of members hinted that the Fed funds rate for next year would be around 3.4%. This implies that policymakers anticipate potentially implementing a single 25 bps cut next year. For the longer term beyond 2028, Fed officials view the neutral rate at approximately 3%.

Recent U.S. economic data presented a mixed, though generally softer, picture of the labor market. The number of Americans filing for unemployment benefits for the week ending November 29th fell below economists' estimates, with initial jobless claims at 191,000, lower than the 220,000 forecast. Meanwhile, continuing claims for the week ending November 22nd were recorded at 1.939 million. Separately, the Challenger Job Report disclosed that employers announced 71,321 job cuts in November—a notable 53% decrease from the high figure announced in October, though still marking a 24% increase year-over-year (YoY).

The European Central Bank (ECB) is widely expected to maintain its three key policy rates unchanged next week. Nevertheless, speculation is mounting regarding the possibility of a rate hike next year, fueled by firmer comments from various ECB policymakers. Governing Council member Gediminas Simkus stated that there is no need to alter rates while inflation remains at the target. His comments were reinforced by Isabel Schnabel, who said she is "quite comfortable" with market expectations that the ECB's next move could eventually be an increase. ECB President Christine Lagarde further supported the positive outlook, noting that the Eurozone economy shows signs of resilience and that the Governing Council may update its growth projections at the December meeting. Technical Break Above Key Moving Averages Ignites Buying_1

Technical Break Above Key Moving Averages Ignites Buying_1

Technical Analysis

The EUR/USD pair has decisively broken out of its bearish channel and has simultaneously surged above the 200-period Moving Average (MA) following the Fed's commentary. This dual breakout strongly fuels the bullish momentum toward the 1.1819 resistance level.

The 100-period and 200-period MAs are located at 1.1588 and 1.1641, respectively. With the price now trading above both these key technical levels, bullish pressure is expected to accelerate toward levels not seen since September. The Relative Strength Index (RSI) is currently at the 66 level, remaining outside of overbought territory, which indicates ample room for further upside movement. The RSI also found strong support at the 48.85 level on the recent dip. A decisive move below this RSI support would open the door for renewed selling; however, given the current technical bias, any retest of the 200-period MA is likely to be met with renewed buying interest.

Trading Recommendations

Trading direction: Buy

Entry price: 1.1645

Target price: 1.1820

Stop loss: 1.1560

Validity: Dec 23, 2025 15:00:00

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