Weak US unemployment data supports a decline in EURUSD

Despite the ECB decision, the EURUSD rate remains under pressure, currently standing at 1.0461. Discover more in our analysis for 13 December 2024.

EURUSD forecast: key trading points

• The US dollar remains under pressure even after a 25-basis-point ECB interest rate cut
• US initial jobless claims rose to 242 thousand, reaching the highest level since mid-October
• US PPI increased by 3.0%, marking the most substantial growth since February 2023
• Traders expect the Federal Reserve to lower the interest rate by 0.25% next week, with the probability estimated at 96.4%
• EURUSD forecast for 13 December 2024: 1.0460 and 1.0410

Fundamental analysis

The EURUSD rate is declining for the sixth consecutive trading session, with sellers seeking to establish a foothold below the 1.0465 support level. The US dollar remains under pressure despite the ECB reducing the interest rate by 25 basis points. Markets are now likely to expect another 25-basis-points cut by the Federal Reserve next week. However, the US regulator’s future actions in 2025 remain uncertain, which adds pressure to the pair according to today’s EURUSD forecast.

The ECB reiterated its commitment to reducing inflation to its medium-term target. However, its press release omitted the statement regarding keeping rates at restrictive levels as long as necessary. The regulator noted that future interest rate decisions would be based on economic data analysis at each meeting without pre-committing to a predetermined course of action.

Meanwhile, the US initial jobless claims rose by 18 thousand to 242 thousand, the highest level since mid-October. This data reinforced expectations of a 0.25% Federal Reserve rate cut at the upcoming meeting, with the markets estimating the odds at 96.4%. At the same time, producer prices rose by 3.0% year-on-year in November, marking the most substantial increase since February 2023 and greatly exceeding analysts’ expectations. Core PPI, excluding food and energy, rose by 3.4%, matching October’s pace and exceeding the average expert forecast of 3.2%.

EURUSD technical analysis

The EURUSD H4 chart shows the market has completed a downward wave, reaching 1.0463. Today, 13 December 2024, a consolidation range may form around 1.0483. A breakout below the range could result in a decline to 1.0446. Once this level is reached, a corrective move towards 1.0483 (testing from below) is possible, followed by a downward wave towards 1.0410 and potentially continuing to 1.0370, the estimated local target.

The Elliott Wave structure and downward wave matrix, with a pivot point at 1.0483, technically validate this scenario. This level is considered crucial for the EURUSD rate. The market continues to develop another downward wave below the central line of a price envelope, which is expected to reach its lower boundary at 1.0410.

Summary

The EURUSD rate remains under pressure, reflecting an uncertain outlook for Federal Reserve monetary policy and the implications of ECB decisions. Rising producer prices and increasing US initial jobless claims strengthen expectations of a Federal Reserve rate cut, which will continue to exert pressure on the US dollar. Technical indicators for today’s EURUSD forecast suggest that the downward wave could continue towards the 1.0460 and 1.0410 levels.