EURUSD undergoes technical rebound amid dollar strength

EURUSD quotes are climbing upward, not far from the key resistance level at 1.1580. However, the pair faces significant fundamental headwinds. Its previous decline was driven by a stronger dollar, which gained momentum on expectations of long-awaited economic releases from the US and potential shifts in the Federal Reserve’s (Fed) monetary trajectory. Although recent labor market data showed an increase in unemployment, markets remained cautious, becoming less confident about future rate cuts. This uncertainty keeps supporting the greenback.

Meanwhile, Europe is full of optimism, with the region’s GDP upward revision to 1.3% and Spain’s impressive growth projection of 2.9%. However, this was not enough to boost the euro. Furthermore, this rise comes at a cost, as the eurozone’s budget deficit could reach 3.4% by 2027, and the debt-to-GDP ratio is expected to climb above 90%. These figures are partly driven by increased defense spending due to the escalation of geopolitical tensions in Eastern Europe. Consequently, fiscal policy faces constraints, and the euro is confronted with structural challenges.

The situation is exacerbated by struggles in key European economies. For example, France's agricultural sector recorded a trade balance deficit for the first time in almost 50 years. This is a worrying sign that the country is gradually losing its footing in this industry. Additionally, personnel changes within the European Central Bank’s (ECB) management are increasing market concerns and weighing on the single currency.

Nevertheless, the current technical setup indicates a potential EURUSD rebound from current levels. The Stochastic Oscillator is nearing oversold territory, signaling a likely upward reversal, while the Chaikin Oscillator is slowing its descent. However, a number of negative fundamental factors will limit the pair’s upside.

The following trading plan may come into play:

Sell EURUSD at the current price during a potential rebound. Set a Take profit order at 1.15250 and a Stop loss one at 1.16300.

The forecast is valid from November 19 to November 26, 2025.