EUR/USD Reaches Its Highest Level in Six Weeks
During ahead Wednesday trading, EUR/USD briefly climbed above 1.1680 — a level not viewn since mid-October. The upswing is largely driven by traders reassessing the widening policy gap between the two major central banks. Looking at the fundamental backdrop ahead of December’s decisions:
→ Markets now regard a December rate cut by the Federal Reserve as highly likely amid political pressure from the Trump administration, reducing the dollar’s appeal and yield advantage.
→ The European Central Bank, on the other hand, appears content to hold steady. With Eurozone inflation sitting near target, there is little sign of an imminent push towards aggressive easing.
EUR/USD Chart: Technical Overview
Throughout November, the pair traded within a broad consolidation area:
→ The 1.1500 handle repeatedly acted as support — although the price slipped below this level twice, it was unable to maintain a break lower.
→ A descending trendline (shown in red) capped the upside as consistent resistance.
As December begins, upward momentum within the blue ascending channel has enabled a bullish breakout above that red resistance line.
Even so, the current rally may be running out of steam, as:
→ This morning’s attempt to take out yesterday’s peak could end with a candle featuring a long upper wick, hinting at rejection.
→ RSI readings are forming conditions suitable for a bearish divergence between swing highs A and B.
Given this backdrop, the recent push towards a six-week high may tempt tradeers back into the market — meaning a retracement towards the lower boundary of the blue channel remains a plausible scenario. A retest of the red line from above is also possible.
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