Published on: 2025-06-13
Updated on: 2025-11-14
The global currency market is shaped by a key divergence: the US Federal Reserve is easing to support a slowing economy, while the European Central Bank is holding steady as the Eurozone shows signs of stabilizing growth.
This fundamental split in monetary policy has trapped the Euro to US Dollar (EUR/USD) exchange rate in a high-stakes, choppy trading environment.
With the US government shutdown recently ending and critical US CPI data due today, markets are on high alert for the next catalyst.
This article cuts through the noise to deliver the updated market outlook, key drivers, and actionable technical forecasts for the EUR/USD pair from November 2025 through May 2026.
As of November 14, 2025, the EUR/USD pair is trading around 1.1638, recovering from a recent dip toward 1.1470 (a three-month low in early November).
This recovery has been driven by the renewed weakness in the US Dollar, primarily on speculation of an extended Fed easing cycle and growing uncertainty over the ongoing US government shutdown.
The pair has managed to hold the critical 1.1500 psychological level, but strong overhead resistance at 1.1700 remains the key hurdle for a decisive bullish reversal.
The immediate outlook is defined by technical indecision and central bank positioning. The EUR/USD is coiling between major support and resistance.
Technical Bias: Neutral to slightly bullish, as the pair recovers from the 1.1470 lows. Momentum indicators (RSI, MACD) are ticking higher but remain in neutral territory, suggesting a lack of strong conviction.
Resistance: 1.1650 (immediate), 1.1700 (strong psychological/technical barrier), and 1.1760/1.1790 (major breakout hurdle).
Support: 1.1550 (tested floor), 1.1500 (major psychological support). A break below 1.1500 targets 1.1420 and potentially 1.1300.
Outlook: Failure to clear 1.1700 will likely keep the pair consolidated in the 1.1550–1.1700 range heading into the year-end holiday season.
Forecasting into 2026 remains highly divergent, centered on the speed of the US labor market slowdown and the extent of the Fed’s easing cycle.
Bullish Case (e.g., MUFG, SocGen): Forecasts range from 1.2000 to 1.2600 by mid-2026. This view relies on the Fed delivering an aggressive cutting cycle to support the slowing US labor market (as hinted by recent disappointing jobs data and surging layoffs), leading to significant dollar depreciation.
Bearish/Conservative Case (e.g., Standard Chartered, Trading Economics): Projections are for a more subdued range of 1.1400–1.1700. This view assumes Eurozone growth (Q3 GDP: +0.2%) remains sluggish, the ECB stays on hold, and the US dollar maintains strength due to its relative yield advantage, especially if the ongoing US political uncertainty is resolved swiftly.
As of November 14, 2025, the EUR/USD pair is trading around 1.1638, recovering from a recent dip toward 1.1470 (a three-month low in early November).
This recovery has been driven by the renewed weakness in the US Dollar, primarily on speculation of an extended Fed easing cycle and growing uncertainty over the ongoing US government shutdown.
The pair has managed to hold the critical 1.1500 psychological level, but strong overhead resistance at 1.1700 remains the key hurdle for a decisive bullish reversal.
The technical bias remains neutral to slightly bullish, driven by the recovery from the 1.1470 low. The pair continues to be defined by high-impact US data, particularly the delayed October CPI release today.
Resistance: 1.1650/1.1700/1.1780. The 1.1700 level is the strong psychological and technical barrier that must be cleared to signal a shift in bullish momentum.
Support: 1.1550/1.1500/1.1470. The 1.1500 psychological level, reinforced by the recent test at the 1.1470 low, serves as the critical floor for the current uptrend attempt.
A bullish breakout above 1.1780 (near the September high) could target the next major psychological level at 1.1900 and potentially challenge the 1.2000 zone.
This outcome requires a significantly weaker-than-expected US CPI print today and aggressive Fed signaling for further cuts.
Failure to clear 1.1700 likely keeps the pair trapped in a tight 1.1550–1.1700 range, with the risk of a fresh drop if support at 1.1500 gives way on strong US data.
Forecasts for early to mid-2026 remain divided, primarily focusing on the extent of the Fed's easing cycle versus the ECB's prolonged hold.
Conservative Models (e.g., Trading Economics, Standard Chartered, and some internal models): These models project EUR/USD trading largely in the 1.1400–1.1750 range by Q1 2026.
This outlook cites the slower pace of Eurozone growth (Q3 GDP: +0.2%), the ECB's commitment to holding rates at 2.00% for longer, and the US Dollar’s eventual resilience if US political risk subsides.
Major Investment Banks (e.g., MUFG, ING): These institutions generally forecast higher levels between 1.1800 and 1.2000+ by mid-2026.
This bullish consensus is anchored on the expectation that the Fed will be forced to cut rates more aggressively (to the 3.00%–3.50% area) to support a slowing US labor market, which will significantly weaken the dollar and narrow the US-Eurozone interest rate differential, triggering substantial capital rotation toward European assets.
| Central Bank | Latest Decision / Policy Update | Impact on EUR/USD |
|---|---|---|
| ECB (European Central Bank) | Held the Deposit Facility Rate at 2.00%. Core inflation is stable. Policymakers remain in a cautious, data-dependent stance with no cuts expected in 2025. | Supports EUR by maintaining the rate advantage over a cutting Fed; acts as a floor for the euro. |
| Fed (US Federal Reserve) | Cut the Federal Funds Rate by 25 bps to 3.75–4.00% on 29 Oct 2025, following a September cut. Markets see a 65%+ chance of another cut in December 2025 amid weakening labour data. | Bearish for USD, as the easing cycle continues to pressure the dollar lower. |
Eurozone GDP (Q3 2025): The preliminary flash estimate showed GDP growing by +0.2% QoQ (up from +0.1% in Q2). This slightly better-than-expected figure confirms the Eurozone is stabilizing but remains in a slow-growth environment.
US Labor Market: Recent data has shown a significant surge in October layoffs and mixed job figures, leading the Fed to prioritize labor market support. This softer data is the primary driver of the expected continued rate cuts.
US Inflation (October 2025): While the official Bureau of Labor Statistics (BLS) CPI is delayed due to the government shutdown, alternative metrics suggest the annual inflation rate is holding around 2.92%.
The official US CPI release on 13 November 2025 is the single most critical event, with a miss either way likely to trigger high volatility and solidify expectations for the Fed's December move.
The biggest near-term risk remains US political uncertainty.
Risk of US Government Shutdown: The prolonged political impasse over the budget amplifies market uncertainty, which historically drives safe-haven flows into the US dollar.
However, the current shutdown fears, coupled with poor job data, are generating renewed USD depreciation as investors anticipate the Fed must ease further.
French Political Instability: Persistent domestic political tensions in France continue to weigh on overall Eurozone investor confidence, capping the Euro’s upside potential.
Trade Wars: The looming threat of new or escalated US tariffs on European goods remains a structural headwind for the Euro, potentially disrupting cross-Atlantic trade and capital flows.
The EUR/USD is currently at 1.1638, stuck in a tight consolidation range as traders await today's crucial US CPI data.
| Level Type | Price | Significance | What to Watch For |
|---|---|---|---|
| Immediate Resistance | 1.1650 | First hurdle for any rally | A break confirms short-term strength |
| Major Resistance | 1.1700 | The long-standing ceiling of the range | Must break and hold to signal a bullish reversal |
| Breakout Hurdle | 1.1780 | September high | A clean break opens the path to 1.2000 |
| Immediate Support | 1.1600 | Short-term floor | A break signals immediate weakness |
| Critical Support | 1.1500 | The psychological and confirmed floor | A break below 1.1470 triggers a major sell-off toward 1.1300 |
1. Trend Following:
Buy pullbacks to support (1.1600/1.1550), sell rallies to resistance (1.1760/1.1790). Confirm with moving averages, follow market reaction to data, and adjust as trends emerge.
2. Range Trading:
If EUR/USD remains between 1.15 and 1.18, look for short-term buys at lows and sells at highs.
3. Breakout Trading:
Watch for a break above 1.1790/1.18 for further upside, or below 1.1500 for a downside extension.
4. Event-Driven Trading:
React to US CPI, Eurozone PMI, and central bank meetings. Keep risk limited ahead of big news.
The next six months will be defined by the "Great Divergence" in central bank policy expectation versus economic reality.
The Euro's Resilience Thesis: The major upside for the Euro hinges on the Eurozone avoiding a major recession while the Fed cuts rates aggressively in Q1 2026.
If Eurozone growth can marginally accelerate (perhaps 0.3%-0.4%) while the US economy slows, the interest rate differential will shrink dramatically, powering the EUR higher.
The Dollar's Enduring Strength Thesis: The major risk to the Euro's long-term forecast is a quick resolution to the US political crisis and an unexpected spike in US inflation (above 3.0%).
Such an event would force the Fed to pause or reverse its easing expectations, sending the dollar surging back towards 1.1400 or lower.
Trend Prediction: The most likely outcome is that the market continues to price in dollar weakness, but the actual pace of depreciation will be slow and choppy, resulting in a gradual grind towards 1.1800 by Q1 2026, punctuated by high volatility around US data releases.
The current rate of 1.1638 sits near established support at 1.1550, offering reasonable value for immediate exchanges. Those who can wait might see rates push towards 1.17, though upside appears limited with resistance at 1.1760 remaining intact.
Most forecasts point to continued range-bound trading between 1.15 and 1.17, with a slight bias towards dollar strength given weak eurozone growth and persistent US inflation at 2.92%. A meaningful break above 1.1760 or below 1.1500 would require significant policy shifts or economic surprises.
Range trading suits the current environment: buy near support at 1.1550–1.1700 and sell near resistance at 1.1700–1.1760. The market is now focused on US CPI data today, November 13, and the next FOMC meeting on December 9-10.
The EUR/USD pair is currently trading around 1.1638 as of November 14, 2025.
Since the last update in mid-October, the pair has only marginally moved, having declined roughly 0.5% over the past month, pressured by the strong initial dollar safe-haven demand during the US government shutdown, before recovering recently as the Federal Reserve's dovish stance took hold.
Forecasts through the first quarter of 2026 continue to point towards a highly volatile, but ultimately range-bound market between 1.1500 and 1.1780.
The resolution of the record 43-day US government shutdown (signed into law on November 12) removes a significant source of immediate risk for the USD and allows attention to pivot back to core economic fundamentals.
Today’s delayed US CPI data release and the upcoming Federal Reserve meeting in December will be the key events determining whether the pair finally breaks out of this consolidation range.
Traders must adapt their strategies around these well-established technical levels.
By responding to scheduled risk events and positioning for the widening divergence in central bank policy (Fed cutting vs. ECB holding), opportunities can be found in what remains a volatile but technically defined trading environment.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment, or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person.
