Euro gains capped near 1.1700 resistance
EUR/USD continues to trade near the 1.1700 level on Thursday, holding onto gains from earlier in the week. The pair bounced from session lows around 1.1680, supported by a dovish monetary policy statement from the Federal Reserve, which has kept the US Dollar under pressure. However, renewed concerns about a potential AI bubble are weighing on market sentiment and limiting the Euro’s upside momentum.
On Wednesday, the Federal Reserve cut interest rates by 25 basis points, bringing the Federal Funds Rate to a range of 3.50%–3.75%. The decision was accompanied by a less hawkish tone, with only two dissenting votes favoring steady rates. President of the United States has expressed confidence in the Fed’s approach, while Fed Chair Jerome Powell signaled that inflation concerns have eased, opening the door for further rate cuts in 2026.
Markets are also pricing in the possibility that Powell may be replaced in May by Kevin Hassett, a White House economic adviser known for his dovish stance. Hassett recently stated that there is “plenty of room” for additional rate cuts.
In a surprise move, the Fed announced a $40 billion bond-buying program starting December 12 to support market liquidity, adding further pressure on the US Dollar.
Investor sentiment turned cautious after Oracle released disappointing sales and revenue forecasts. The company has made massive investments in AI, including a $300 billion deal with OpenAI and plans to build AI data centers. The market is now questioning the profitability of such investments, reviving fears of an AI bubble.
This risk-averse mood has provided some support to the safe-haven US Dollar, despite its broader weakness following the Fed’s dovish stance.
The Euro showed strength against most major currencies, especially the Australian Dollar (+0.49%), while it weakened slightly against the Swiss Franc (-0.19%).
EUR/USD remains technically bullish after breaking resistance at 1.1680. The 4-hour MACD is printing green bars, and the RSI remains in positive territory, suggesting further upside potential.
Immediate resistance lies at 1.1705, followed by 1.1730 and 1.1780. On the downside, support is seen at 1.1680, 1.1615, and 1.1590.
In Europe, ECB President Christine Lagarde reiterated that the bank’s monetary policy remains well-positioned and hinted at possible upward revisions to regional growth forecasts.
The European economic calendar is quiet on Thursday, while in the United States, markets await Initial Jobless Claims data to assess labor market trends following the Thanksgiving holiday.