Published: 1 December 2025,03:34
Daily Market Analysis New
*Euro stability reflects a supportive macro backdrop, with inflation drifting toward the ECB’s 2% target and policy guidance from Frankfurt remaining clear.
*With French uncertainty resolved under PM Gabriel Attal, attention shifts to the dispute between the Bank of Italy and the ECB over Rome’s potential use of its €300B gold reserves.
*Tomorrow’s eurozone inflation print will guide near-term EUR direction, while the gold-reserve debate remains a low-impact but watch-worthy structural risk unless tensions escalate.
The euro has established a period of relative stability, with EUR/USD consolidating near the 1.1500 technical anchor throughout recent sessions. This equilibrium reflects a supportive fundamental backdrop characterized by inflation returning toward the European Central Bank’s 2% target and a clearly communicated policy path from Frankfurt.
The resolution of French political uncertainty following the reappointment of Prime Minister Gabriel Attal has removed a significant overhang, allowing markets to refocus on economic fundamentals. However, a new source of potential volatility has emerged from the evolving dispute between the Bank of Italy and ECB regarding Italy’s substantial gold reserves.
The conflict centers on Italy’s exploration of potentially leveraging its $300 billion gold holdings to address public debt constraints or finance fiscal measures—a proposition that clashes with the ECB’s view of these reserves as collective assets crucial for monetary stability. While this dispute introduces institutional tension, market impact has thus far been contained given the significant legal and political hurdles to any actual gold sales.
Looking ahead, tomorrow’s eurozone CPI print represents the immediate catalyst for potential EUR movement. A reading that confirms inflation is tracking toward the ECB’s target could reinforce the currency’s recent stability, while any significant deviation might prompt repositioning ahead of the central bank’s December meeting. The gold reserve discussion bears monitoring for systemic implications, though its near-term market impact appears limited barring escalation.
Technical Analysis
The EURUSD pair has developed multiple constructive technical elements in recent sessions, forming both an inverse head-and-shoulders pattern followed by a double-bottom formation above the pattern’s neckline. These classic reversal structures suggest underlying buying interest has emerged at lower levels. However, the subsequent price action has failed to demonstrate convincing bullish follow-through.
The pair remains constrained below the critical 1.1620 resistance level, trading within a wide sideways consolidation pattern that reflects equilibrium between buyers and sellers. This inability to capitalize on the bullish patterns indicates weakening upward momentum. A decisive break above 1.1620 is required to validate the reversal structures and signal a resumption of the bullish move.
Momentum indicators reflect this deterioration in bullish energy. The Relative Strength Index (RSI), while holding above the 50 midline, shows fading upward momentum. More significantly, the Moving Average Convergence Divergence (MACD) has generated a bearish death cross at elevated levels, suggesting the previous bullish momentum has effectively dissipated.
The technical setup presents a critical juncture. The pair must either break above 1.1620 to confirm the reversal patterns or risk a breakdown from the current consolidation range. The 1.1520-1.1550 zone now represents crucial support—a breach below this area would invalidate the bullish patterns and likely trigger a deeper corrective phase toward the 1.1450 support cluster.
Resistance Levels: 1.1620, 1.1705
Support Levels: 1.1540, 1.1450
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