EUR/USD Price Forecast - Eur Near 1.17 as Venezuela Shock and $4,400 Gold Clash With Fed Cut Bets

EUR/USD: Geopolitics, Rates And A Market Coiling Around 1.17

Macro backdrop: Venezuela shock, gold at $4,400+ and a cautious dollar bid

US action in Venezuela and the capture of Nicolás Maduro pushed classic hedges sharply higher while keeping broader risk intact. Gold is trading around $4,413–$4,421 per ounce after briefly hitting a record near $4,549.71 on 26 December. Silver trades close to $75.5 with gains around 3.6–3.9%. Defense stocks in Europe and the US are up roughly 4–8%, while energy names like Chevron have risen about 4% with pre-market spikes above 7%. Brent crude has moved only modestly, up a bit over 1% toward $61.50 a barrel, as Venezuela’s production is roughly 1% of global output and ample supply caps the move. At the same time, US indices are firm: the Dow near 49,032, the S&P 500 close to 6,908, the Nasdaq around 23,438, and the VIX at roughly 14.8. That mix is important for EUR/USD: geopolitical risk is being hedged via gold and defense, not via a broad equity liquidation, which limits the upside in the dollar to tactical spikes rather than a structural break.

EUR/USD and the US dollar: political risk, data and the 98 DXY zone

On the dollar side, price is responding to both politics and macro. The Dollar Index is hovering around 98.2, ticking about 0.07% higher intraday. The immediate support for the greenback came from the Venezuela headlines and the typical “risk-off” reflex, but the underlying driver remains the path of US rates. ISM Manufacturing printed at 47.9, below both 48.2 prior and expectations near 48.3, still firmly in contraction territory. Earlier CPI and NFP delivered softer readings as well, and futures are discounting roughly 50–63 bps of Fed cuts into 2026, with two cuts the working base case and March flagged as the earliest realistic window if incoming data undershoots consensus. Despite that, Fed officials are signaling patience; comments that additional easing “could be some way off” if growth holds have prevented yields from collapsing. The 10-year sits around 4.17–4.18%, high enough to backstop the dollar on stress days but low enough that EUR/USD is no longer trading under a one-way rate advantage for the US.

EUR, ECB and the changing rate spread behind EUR/USD

On the euro side, the ECB has frozen forward guidance and shifted fully to a data-dependent stance. The current deposit rate is held with language that policy is “appropriate,” and there is no pre-commitment to easing. Officials stress that upcoming moves can be in either direction. Markets interpret that as a soft but clear removal of near-term easing risk that previously capped EUR/USD rallies during 2024. The euro now trades as a currency whose central bank is likely to sit on its hands for much of 2026 while the Fed trims at the margin. The critical macro trigger is Eurozone inflation: as long as CPI stays below roughly 2.5%, the market can live with the ECB staying on hold; a sustained break above that band would force pricing of potential hikes and raise the euro’s rate floor. Net, the rate differential that pushed the pair lower in earlier years is narrowing: roughly two Fed cuts are priced, while the ECB is priced closer to inertia. That spread compression is the backbone of the medium-term bid in EUR/USD, even if short-term flows are currently favoring the dollar.

Spot EUR/USD: between 1.1670 support and 1.1800–1.1850 resistance

Price action reflects this tug of war. EUR/USD has been rejected repeatedly near 1.1800–1.1850, a resistance band which has capped upside for weeks. On the downside, buyers have defended the 1.1670 area, which coincides with a key demand zone flagged by multiple desks and a 38.2% retracement on the recent upswing in shorter timeframes. In parallel, other snapshots show the pair trading below 1.1700 after US data, confirming that the market is working the 1.17 handle as the pivot. The configuration is simple: 1.1670–1.1635 is the first serious support pocket; 1.1800–1.1850 is the resistance shelf that has to be cleared to re-open the topside.

Short-term structure: intraday EUR/USD ranges and trendlines

On the 4-hour chart, EUR/USD recently broke an upward trendline, allowing a deeper pullback into the 1.1670 zone. That level is not just horizontal support; it aligns with the 38.2% Fibonacci retracement of the latest swing and forms a confluence area where buyers can define risk just below support and aim for a re-test of the 1.19 handle. Sellers are focused on two tactical triggers: intraday failures at a minor descending trendline around 1.1730, and a clean break below 1.1670 that would open extension toward the 1.14 region. On the 1-hour view, price is often pinned near the lower bound of its average daily range, which statistically reduces the odds of a further breakdown during the same session and favors consolidation or a corrective pop back toward that 1.1730 intraday trendline. For now, that leaves EUR/USD oscillating between 1.1670 support, intraday supply around 1.1730, and the more strategic resistance band at 1.1800–1.1850.

Daily EUR/USD: 1.1635 EMA floor and volatility compression

The daily picture remains constructive. EUR/USD trades comfortably above its rising 100-day EMA near 1.1635, a moving average that has acted as a dynamic floor for every corrective attempt since mid-November. As long as daily closes hold above that line, the trend structure remains bullish. Daily RSI around 59–60 confirms this: high enough to indicate trend strength, not high enough to signal exhaustion. There is no clear bearish divergence; momentum is tracking price rather than fading against it, in contrast with Q3 when failed rallies were accompanied by weakening RSI. Bollinger Bands have tightened, with the mid-band around 1.1738 and the upper band near 1.1820, while spot trades close to the middle of that envelope. This is textbook volatility compression after an advance, typically preceding a directional release. A daily close above roughly 1.1820 would mark a volatility break that historically has delivered follow-through of around 120–180 pips in EUR/USD.

Weekly EUR/USD: why 1.1747–1.1775 is a decision band, not a ceiling

The weekly map explains why the current area feels heavy. The 1.1747–1.1775 band is defined by three overlapping structures: it houses the 2025 high-week close, it coincides with the 61.8% retracement of the September downswing, and it lines up with the upper boundary of the medium-term advance from the 2025 lows. Markets rarely reverse from this kind of confluence without first breaking meaningful support. That support begins near 1.1500, anchored by historic highs around March 2020 and 2022, and by a deeper retracement of the July leg higher. As long as weekly closes hold above 1.1500, the current behavior is best described as consolidation within an uptrend, not a topping formation. A decisive weekly rejection from this band would require a sustained move below 1.1500 and follow-through into the next demand layers; anything short of that is a range pause within a bullish regime.

Monthly EUR/USD: 1.1917–1.2020 as the next structural test

On the monthly chart, EUR/USD has already delivered a move of more than 17% off the yearly lows, pushing into a multi-year resistance corridor between 1.1917 and 1.2020. That band is not arbitrary. It aligns with the 100% extension of the 2022 advance, the 38.2% retracement of the 2008 secular decline, and the upper parallel of a 2022-anchored pitchfork. Price has not yet closed above this belt, but it is coiling just below. Monthly momentum is at its strongest since 2021, a period that historically marked exhaustion only after a parabolic blow-off, not after the kind of controlled advance and consolidation currently visible. A sustained monthly close above 1.2020 would be a structural event, unlocking a path toward reference levels such as 1.2218 (a major 2021 high-week close), 1.2350–1.2414 (2018–2021 highs band), and ultimately the 1.2990 area tied to a 1.618 extension of the 2022 leg. Those are not near-term targets; they are medium- to long-term milestones that only become relevant if the market accepts 1.2020 as support rather than resistance.

Event risk around EUR/USD: jobs, ISM and the Fed chair question

The immediate calendar is dense around EUR/USD. On the US side, traders are watching the ISM manufacturing survey, ISM services, ADP, JOLTS, weekly jobless claims and, crucially, non-farm payrolls at the end of the week. A strong upside surprise across these releases would push yields and the dollar higher, potentially driving EUR/USD down through 1.1670 and testing the 1.1635 EMA floor, with deeper supports at 1.1394 and then 1.1254–1.1275, where the 52-week moving average, a 38.2% yearly retracement and a key 2023 swing high cluster. A softer data run would reinforce expectations for roughly two Fed cuts in 2026, cap the dollar, and give the pair room to attack 1.1800–1.1820 again. In parallel, political risk remains in play: markets are watching President Trump’s choice for the next Fed chair after Powell’s term ends in May. A nominee perceived as explicitly dovish would compress the US risk premium further and support the euro; a hawkish-leaning candidate with strong inflation-fighting credentials would do the opposite.

Trading map for EUR/USD: key levels, scenarios and positioning bias

Putting the pieces together, EUR/USD is trading inside a well-defined structure with clear triggers. On the upside, the bullish path requires holding above 1.1635 on daily closes, defending the 1.1670 zone on dips, and then pressing into 1.1800–1.1820. A clean daily close above 1.1820 would validate a volatility expansion scenario toward 1.1875, then the 1.1917–1.2020 monthly resistance band. Acceptance above 1.2020 on a monthly basis would then activate medium-term objectives at 1.2218, 1.2350–1.2414, and potentially the 1.2990 extension area over a longer horizon. On the downside, the structure only starts to crack if 1.1500 fails on a closing basis. A break of 1.1670 without follow-through below 1.1635 is a normal correction within trend, likely targeting the 1.15–1.16 pocket where buyers should reappear. A decisive violation of 1.1500 would open a deeper move to 1.1394 and then into 1.1254–1.1275, forcing a complete reassessment of the bullish narrative.

EUR/USD stance: bullish bias, buy-on-dips while 1.1500 holds

After integrating the Venezuela shock, the safe-haven rush into gold above $4,400, the Fed’s expected 50–63 bps of cuts, the ECB’s neutral stance, the Dollar Index near 98, and the multi-timeframe technical picture from 1.1670 support up to the 1.1917–1.2020 resistance band, the conclusion is clear rather than neutral. EUR/USD remains a BUY on dips as long as weekly price holds above 1.1500. Short-term, pullbacks into 1.1670–1.1635 are opportunities to position for a retest of 1.1800–1.1820 and, if volatility breaks, a move toward 1.19–1.20. The main risk to that view is not immediate collapse; it is a temporary correction driven by stronger-than-expected US data or a hawkish surprise around Fed communication that forces a test of the lower support layers before the broader uptrend can resume.

That's TradingNEWS