EUR/USD Surges Above 1.1600, Eyes 200-Day SMA as USD Weakness Persists
November 27, 2025 – FXStreet
The EUR/USD currency pair has extended its rally for a fourth consecutive day, climbing above the significant 1.1600 level to reach a one-and-a-half-week high during Asian trading on Thursday. This upward momentum is largely driven by ongoing weakness in the US Dollar (USD), which has encountered persistent selling pressure amid shifting market expectations and a diverging monetary policy outlook between the Federal Reserve (Fed) and the European Central Bank (ECB).
USD Under Pressure Amid Dovish Fed Sentiment
The US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, sank to its lowest level in over a week, reflecting a pronounced bearish bias for the USD. Market participants are now pricing in around an 85% likelihood that the Federal Reserve will enact a rate cut in December. This sentiment has been fueled by recent dovish remarks from several Fed officials, despite a mixed batch of economic data released over the past week. The combination of subdued inflation signals and cautious Fed commentary has eroded the safe-haven appeal of the USD, providing tailwinds for the EUR/USD pair.
Euro Benefits From ECB’s Cautious Yet Steady Stance
In contrast, the Euro (EUR) is drawing support from a relatively constructive and patient European Central Bank. ECB Vice President Luis de Guindos recently reiterated confidence that current interest rates are appropriate given prevailing economic conditions. Croatian central bank governor Boris Vujcic added that any future ECB rate cuts should be contingent on price growth dipping below target levels without signs of rebounding. Meanwhile, ECB Chief Economist Philip Lane emphasized the need for non-energy inflation to ease in order to maintain price stability near the 2% goal.
Most economists currently expect the ECB to keep its deposit rate on hold through the remainder of this year and not to alter it throughout 2026. This backdrop favors Euro strength and supports the case for further gains in the EUR/USD currency pair.
Key Resistance at the 200-Day Simple Moving Average
Despite the current bullish momentum, caution remains warranted among traders. The pair is approaching a crucial technical hurdle—the 200-day Simple Moving Average (SMA)—located near the 1.1625 region. Traders and investors will be closely watching for a sustained break above this level to confirm a positive medium-term outlook and signal potential for continued appreciation.
Adding to the uncertainty are relatively thin trading volumes influenced by the ongoing US Thanksgiving holiday. The low liquidity environment may amplify volatility or limit meaningful directional moves in the near term.
Weekly Currency Performance Snapshot
Reflecting the evolving dynamics, the USD has been generally weaker this week against most major currencies, with notable exceptions such as the Japanese Yen, against which it remains relatively resilient. The Euro has outperformed many peers, benefiting from positive ECB guidance and weakening dollar conditions.
| Currency Pair | USD Change This Week |
|---|---|
| USD/JPY | -0.30% |
| EUR/USD | +0.83% |
| GBP/USD | +1.17% |
| USD/CAD | -0.50% |
| AUD/USD | +1.17% |
| NZD/USD | +1.99% |
| USD/CHF | -0.71% |
Note: Negative percentages indicate USD weakness against the quoted currency.
Outlook
The near-term trajectory of EUR/USD hinges on the USD’s ability or inability to stabilize amid softer Federal Reserve guidance and the Eurozone’s steady monetary stance. A decisive move above the 200-day SMA at 1.1625 would bolster the bullish case and potentially open the door to higher targets. Conversely, any failure to sustain above this technical resistance, combined with renewed USD strength, could temper the current rally.
Traders are advised to remain cautious, particularly given the lower trading volumes of the Thanksgiving holiday period, which can result in exaggerated price swings and less reliable signals.
Author: Haresh Menghani, FXStreet
Haresh Menghani is a seasoned financial market analyst with over a decade of experience delivering in-depth analysis of global currency markets.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Market conditions can change rapidly, and investors should conduct their own research before making any financial decisions.