EUR/USD Intraday Bullish Momentum Confronts US CPI/PPI Event Risk & Fed-ECB Divergence - Analysis & Forecast

EUR/USD displays developing intraday bullish momentum, pushing above short-term moving averages, yet this upward thrust faces significant structural resistance from higher timeframes. The overall technical bias remains neutral, with a slight bullish tilt on lower timeframes, while the longer-term perspective maintains a neutral-to-bearish stance. Fundamentally, the Euro finds support from the European Central Bank's (ECB) cautious policy tone, which indicates current interest rates are appropriate and inflation is nearing its 2% target, leading to low expectations for a rate cut by September 2026. Conversely, the US Dollar grapples with growing expectations for a Federal Reserve (Fed) rate cut in December, driven by easing inflation and economic uncertainty, despite hopes for a US government shutdown resolution. A critical cluster of high-impact US economic data, including CPI, PPI, and Retail Sales, arrives tomorrow and the day after, posing substantial event risk that holds the potential to override technical levels and dictate the pair's near-term direction. The market's current transitional phase and the imminent data deluge demand extreme caution for directional plays.

Technical Analysis

Multi-Timeframe Market Structure

The EUR/USD daily (D1) chart closed below its EMA20 (1.15743) and EMA50 (1.16181), confirming a neutral-to-bearish bias from a longer-term perspective. The MACD is negative at -0.002962, and the RSI sits at 45.75, indicating neutral momentum with a slight bearish tilt. The ADX at 23.70 suggests a developing trend, but the SAR (1.15829) remains above price, acting as a dynamic resistance, aligning with the broader fundamental narrative of USD strength on risk-off sentiment or robust US data.

On the H4 timeframe, the pair trades above the EMA20 (1.15485) and EMA50 (1.15507), indicating a positive shift in medium-term sentiment. The MACD is positive at 0.000818, and the RSI is at 56.39, supporting a bullish momentum. However, the SAR (1.15809) remains above price, conflicting with the EMA and MACD signals, highlighting a potential ceiling that aligns with the significant fundamental resistance posed by an impending cluster of US economic data. The ADX at 24.21 suggests developing trend strength, but this strength is untested against higher timeframe resistance.

For the short-term intraday view, the H1 chart shows price trading just below its EMA20 (1.15579) but above the EMA50 (1.15531) and EMA200 (1.15511), indicating a slight bullish bias for the immediate term. MACD is positive (0.000007), and RSI is at 54.45, confirming positive momentum, though ADX at 15.61 suggests a ranging environment. The M30 chart provides clearer bullish signals, with price trading firmly above its EMA20 (1.15579), EMA50 (1.15582), and EMA200 (1.15457). M30 MACD is positive (0.000004), and RSI is at 56.42, pointing to robust short-term buying pressure. The SAR (1.15496) is below price, providing intraday support. While H1 shows consolidation, M30 indicates a recent break higher, suggesting a short-term bullish bias with potential for further upside if the 1.15650 level is cleared, particularly if upcoming US data undershoots expectations.

Critical Price Levels & Momentum Assessment

The market exhibits mixed trend consensus, with D1 showing a neutral-to-bearish stance while H4, H1, and M30 display varying degrees of bullish momentum. Momentum quality is moderate, driven by positive MACD and RSI readings on lower timeframes, but contradicted by higher timeframe SAR and D1 EMA alignment. This transitional phase, marked by H1 ADX below 20 and M30 ADX at 20.79, reflects the underlying fundamental uncertainty ahead of major US data releases. Intraday momentum supports a push higher, but it faces significant overhead resistance from the prevailing longer-term structure, a scenario that would require a substantial fundamental catalyst to overcome.

• Resistance:
  • 1.15650: Intraday high from the M30 timeframe. A break here would align with short-term bullish technicals and could be fueled by disappointing US economic data.
  • 1.15800-1.15830: Confluence of H4 and D1 Parabolic SAR levels, representing significant structural resistance. This zone is a critical barrier, where stronger-than-expected US data would likely trigger a rejection, reinforcing the longer-term bearish bias.
• Support:
  • 1.15500-1.15510: Confluence of H4 EMA50, H1 EMA200, and psychological level. This level provides robust technical support, aligning with the ECB's cautious stance which limits EUR downside.
  • 1.15410: H1 Parabolic SAR, providing dynamic intraday support. This level is crucial for maintaining the current short-term bullish momentum.

Fundamental Market Drivers

Central Bank Policy & Economic Outlook

The divergence in central bank policy expectations remains a primary driver for EUR/USD. The European Central Bank maintains a cautious stance, with Vice President Luis de Guindos stating that current interest rates are "appropriate" and inflation is moving closer to the 2% target. Other ECB policymakers also urge vigilance against lingering price pressures. Money markets price in only a 40% chance of an ECB rate cut by September 2026, indicating a relatively hawkish outlook that provides fundamental support for the Euro. This cautious approach by the ECB underscores a commitment to price stability, bolstering the Euro's appeal against a potentially dovish Federal Reserve.

In contrast, the US Dollar faces headwinds from growing economic uncertainty, fueling expectations for a near-term Fed rate cut. The CME FedWatch Tool indicates markets are pricing in a 62% chance of a 25 basis point rate cut in December. Fed Governor Stephen Miran reinforced this dovish sentiment, stating that inflation is easing and suggesting a 50-basis-point or at least 25-basis-point reduction in December, citing that the economy is not at maximum employment and recent data supports further easing. This dovish pivot expectation for the Fed directly contrasts with the ECB's steady stance, creating a fundamental backdrop that generally favors EUR/USD upside, assuming US economic data aligns with these dovish expectations. The upcoming German ZEW Survey data, due later today, may offer further insights into Eurozone economic sentiment, although its impact is likely overshadowed by the imminent US data.

Market Sentiment & Risk Environment

Market sentiment is currently influenced by a mixed bag of developments. Hopes for an imminent resolution to the US government shutdown, with the Senate passing a funding bill, have provided some support to the US Dollar and a general risk-on mood. This positive development could ease immediate concerns about US economic stability. However, this optimism is tempered by broader economic uncertainty within the United States, which continues to fuel the expectations for Fed rate cuts. The risk-on mood, stemming from the shutdown resolution, has a complex effect: it generally supports riskier assets, but for EUR/USD, it creates a push-pull dynamic where the prospect of a less stable US economy (leading to Fed cuts) can weaken the USD, while a stronger global risk appetite may also benefit the EUR. The market is highly sensitive to incoming economic data, which will either confirm or challenge these prevailing sentiments. Any signs of robust US economic performance would quickly reverse the current dovish Fed expectations, strengthening the USD and challenging the developing bullish momentum in EUR/USD. Conversely, weak US data will reinforce the dovish Fed narrative, providing a strong fundamental tailwind for the Euro.

Integrated Trading Execution

Primary Trading Scenario

• Bias: Bullish - Short-term technical bullish momentum aligns with a fundamentally dovish Federal Reserve outlook, contingent on upcoming US economic data.
• Trigger/Entry: A sustained break above 1.15650, specifically an M30 candle close above this level, indicates a continuation of short-term buying pressure. Entry at 1.15653 ± 3 pips. This entry is contingent on US CPI data tomorrow confirming disinflationary trends or missing forecasts, reinforcing Fed rate cut expectations.
• Stop-Loss: Place stop-loss below the H1 EMA20 and M30 EMA50 confluence, around 1.15560 (approximately 1.25x H1 ATR). This stop-loss respects key intraday support and manages risk effectively against potential volatility from US data.
• Profit Targets:
  • Target 1: 1.15750 (R:R ~1:1.5) - This target approaches the lower bound of the H4/D1 SAR resistance zone, representing a logical initial profit-taking level before encountering stronger structural resistance.
  • Target 2: 1.15820 (approaching H4/D1 SAR, R:R ~1:2.5) - This target is strategically placed just shy of the significant H4/D1 SAR resistance cluster, where a fundamental catalyst of significantly weaker US data would be required for a sustained break.
• Session Context: This scenario is most viable during the London session, preceding the major US CPI data release, or if US CPI data tomorrow proves significantly weaker than anticipated, strengthening the case for a dovish Fed pivot.

Alternative Market Scenario

• Invalidation: An M30 close below 1.15600 invalidates the primary bullish scenario, indicating a loss of short-term buying momentum. Stronger-than-expected US economic data, particularly CPI, would fundamentally trigger this invalidation.
• Bias: Bearish - Rejection at structural resistance, driven by a stronger US Dollar in response to robust US economic data or a less dovish Fed narrative.
• Trigger/Entry: Consider a short entry at 1.15597 ± 3 pips following rejection from the 1.15650 or 1.15800-1.15830 resistance zones, confirmed by bearish candle formation. This entry is contingent on US CPI data tomorrow surprising to the upside, reducing Fed rate cut expectations.
• Stop-Loss: Place stop-loss above the intraday high, at 1.15680 (approximately 1.25x H1 ATR).
• Profit Targets:
  • Target 1: 1.15510 (H4 EMA50 / H1 EMA200 confluence, R:R ~1:1) - This target aims for the confluence of medium-term moving averages, offering a strong support zone.
  • Target 2: 1.15420 (H1 SAR, R:R ~1:2) - This target extends to a key dynamic support level, reflecting a more significant bearish move.
• Session Context: This scenario is more likely in the Asian or early London session if current bullish momentum wanes, or if tomorrow's US CPI data surprises to the upside, preceding the major US data releases.

Risk Management & Catalyst Analysis

Trade Risk Assessment

The confluence quality for EUR/USD is medium. While intraday technical signals show bullish alignment, they conflict with the neutral-to-bearish stance on the D1 timeframe and the strong overhead SAR resistance. The proximity of a high-impact cluster of US economic events on November 13th and 14th significantly elevates overall market risk. These events carry the potential to introduce extreme volatility and override any existing technical setups. The divergence in central bank policies, with the ECB maintaining a cautious stance while the Fed is expected to be dovish, creates a fundamental tension that can amplify market reactions to data releases. Intraday-specific risks include lower liquidity during the Asian session, which can lead to false breakouts, and sudden volatility during session transitions, particularly into the London open. Given the heightened event risk, traders must consider reducing standard position sizes by 50% for any trades initiated within 4 hours of tomorrow's US CPI release. An H1 ATR of 0.000720 (7.2 pips) is advised for calculating stop-loss buffers, with an expansion to 1.5x ATR if volatility increases.

Economic Calendar & Event Impact

The upcoming economic calendar features several high-impact US events that will significantly influence EUR/USD, with no high-impact Eurozone events scheduled in the provided calendar for the immediate forecast period:

• US Core CPI m/m (Tomorrow, 13:30 UTC): Forecast 0.3%, Previous 0.2% - This is a critical inflation indicator. A reading below forecast reinforces Fed dovishness and supports EUR/USD upside. A reading above forecast strengthens the USD and increases bearish pressure.
• US CPI m/m (Tomorrow, 13:30 UTC): Forecast 0.2%, Previous 0.3% - Measures overall consumer inflation. A weaker-than-expected figure drives USD depreciation and EUR/USD gains, while a stronger figure does the opposite.
• US CPI y/y (Tomorrow, 13:30 UTC): Forecast 3.0%, Previous 3.0% - Annual inflation data, a key metric for the Fed's policy trajectory. Any deviation from forecast will have a high impact on USD and Fed rate cut expectations.
• US Unemployment Claims (Tomorrow, 13:30 UTC): Impact: High - This labor market indicator provides insights into economic health. A significant increase in claims suggests economic weakness, reinforcing Fed dovishness and benefiting EUR/USD.
• US Core PPI m/m (November 14, 13:30 UTC): Impact: High - Producer Price Index data provides an early look at inflationary pressures. A lower-than-expected reading supports disinflationary trends and Fed rate cut bets.
• US Core Retail Sales m/m (November 14, 13:30 UTC): Impact: High - A key measure of consumer spending, indicating economic strength. A weak reading reinforces concerns about US economic health, favoring EUR/USD.
• US PPI m/m (November 14, 13:30 UTC): Impact: High - Overall Producer Price Index data. Similar to Core PPI, this influences inflation expectations and thus Fed policy.
• US Retail Sales m/m (November 14, 13:30 UTC): Impact: High - Total retail sales, a broad indicator of consumer demand. Strong sales could temper Fed dovishness, strengthening the USD, while weak sales would have the opposite effect.

These events collectively shape Federal Reserve policy expectations and will determine near-term EUR/USD direction.

Synthesized Market Outlook

The EUR/USD market is at a critical juncture, balancing short-term technical bullish momentum against significant higher-timeframe structural resistance and an overwhelming fundamental event risk. The underlying narrative of a cautious ECB maintaining rates versus a dovish Fed preparing for potential rate cuts provides a medium-term fundamental tailwind for EUR/USD. However, this bias is highly contingent on the outcome of the upcoming US CPI, PPI, and Retail Sales data releases.

Technically, a sustained break above 1.15650 is necessary to validate further short-term upside, with 1.15800-1.15830 acting as a formidable structural ceiling. Failure to clear these resistance levels, especially if accompanied by strong US economic data, will likely trigger a reversal towards 1.15510 and 1.15420. Traders must monitor these technical levels closely, understanding that their significance is amplified by the fundamental catalysts on the horizon. The market's reaction to tomorrow's US CPI data will be paramount, either reinforcing the Fed's dovish outlook and supporting EUR/USD's upward trajectory or strengthening the USD and prompting a rejection from resistance. Position sizing must be conservative, reflecting the heightened volatility expected around these high-impact events.