EUR/USD’s November Rally Starts to Fade

EUR/USD is moving lower to start the week with the pair trading below 1.1600. The market continues to shift back into a more defensive posture after last week’s retracement in risk appetite.

On the Euro side, comments from ECB Vice President Luis de Guindos that inflation risks remain and that external pressures including tariffs and sovereign stress could complicate the outlook did little to help sentiment. The remarks underscored that the ECB sees limited room to ease policy but offered no new support for the currency.

Across the pond, the U.S. Dollar is seeing gains accumulate against its major counterparts as traders prepare for the release of delayed inflation and labor market data following the government shutdown. With the backlog about to clear the market (September U.S. nonfarm payrolls are due out on Thursday, November 20) is reassessing December Fed cut odds and leaning towards no cut.

EUR/USD Daily Price History

In the above chart, EUR/USD rates have found resistance near 1.1670, where the pair failed at the end of October. From a technician’s perspective, the inability to breach the area around the late-September swing lows/late-October swing highs keeps intact the trend of lower highs and lower lows. EUR/USD is seeing momentum fade now that the uptrend from the November low has started to break, with the pair below its 20-day exponential moving average (EMA) and 50-day EMA, both of which have negative slopes.

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