Fed Turns Dovish – Is the Euro Taking the Throne?

Dec 1, 2025

In the current environment, the market is expecting the Fed to become increasingly dovish, while the ISM Manufacturing PMI—though forecasted to rise slightly—remains below the 50 mark. This indicates that the U.S. manufacturing sector is still not strong enough to support the USD. As a result, the dollar struggles to generate sustainable bullish momentum, unintentionally giving stronger support to the euro. From a sentiment perspective, as long as the data isn’t overly positive for the USD, capital flow will continue to favor EURUSD.

Looking at the H4 chart, the bullish structure is clear: price keeps forming higher lows, respecting the ascending trendline, and trading above the Ichimoku cloud — all signs that the primary trend remains bullish. The 1.1560 zone, aligned with both the trendline and the top of the cloud, acts as critical support, while 1.1650 stands out as the natural upside target for the current bullish wave.

My preferred scenario: EURUSD may make a small pullback toward 1.1560–1.1580 to retest support before bouncing higher toward 1.1650. As long as price stays above the trendline and doesn’t break below 1.1560, I continue to view this market as leaning strongly toward buying rather than selling.

In summary, with news flow putting pressure on the USD and technical structure supporting the bulls, the short-term trend for EURUSD remains decisively bullish.

Dec 2, 2025

Trade active

Dec 3, 2025

Trade closed: target reached