The euro-dollar pair maintains a bullish outlook. Although EUR/USD buyers have not managed to hold above the resistance level of 1.1750 (the upper line of the Bollinger Bands on the D1 timeframe), the pair consistently returns to this price barrier after downward price pullbacks. The upward momentum of the pair is primarily driven by the overall weakening of the greenback, amid increasing confidence that the US Federal Reserve will again cut interest rates at the beginning of next year. Even hawkish signals from some Fed representatives have not altered the prevailing dovish sentiment. The dollar continues to face background pressure.

The European currency is also supporting EUR/USD buyers. For example, the October data on industrial production growth in the European region, published on Monday, favored the euro. The monthly indicator rose to 0.8%, against a forecast of 0.1% (the indicator was 0.2% in September). This is the strongest result since May of this year. Year-on-year, production volume increased by 2.0%, following weak growth (1.2%) in the previous month. The indicator has been growing for the second consecutive month. Germany reaffirmed its reputation as the "locomotive" of the European economy, with industrial production growth in the country among the driving forces behind the recovery. France exhibited more restrained dynamics, while Italy showed a decline.

Overall, the report indicated that the European industrial sector is growing, albeit at a moderate pace. This is another argument in favor of the European Central Bank maintaining a wait-and-see position. EUR/USD traders reacted positively to the release, as the ECB's December meeting takes place this Thursday.

Nevertheless, the European currency cannot independently drive the pair higher. The growth engine remains the greenback, which is weakening across the market. Notably, just on Friday, dollar bulls counterattacked after hawkish statements from Fed officials.

For instance, Cleveland Fed President Beth Hammack stated that the Fed needs to keep the key interest rate at its current level for the foreseeable future. Justifying her position, she pointed to inflation, which, she said, remains too high. It is worth noting that Hammack will be among the voting members of the FOMC next year, so her comments supported the US currency.

Her colleague from the Chicago Fed, Austan Goolsbee, also voiced hawkish signals, stating that "prices are one of the main problems that concern companies and consumers" while the labor market cools at a "moderate pace."

A similar position was taken by Kansas City Fed President Jeff Schmid, who stated that monetary policy should remain moderately restrictive, as US inflation remains "too high."

In other words, Hammack, Goolsbee, and Schmid (the latter two voted to keep rates unchanged at the December meeting) raised concerns about inflation risks, pushing the condition of the labor market to the background.

This approach resonated with dollar bulls and, consequently, with sellers of EUR/USD—amid a temporary strengthening of the greenback, the pair decreased to the base of the 17th figure on Friday. However, on Monday, the price returned to the resistance level of 1.1750 (the upper line of the Bollinger Bands on the daily chart).

Several reasons can explain this price dynamic.

First, not all members of the Fed share the hawkish stance of Hammack, Goolsbee, and Schmid. In particular, Philadelphia Fed President Anna Paulson took a dovish stance on Friday, stating that a weak labor market is a more serious issue than rising inflation. Additionally, this week, other "doves" will express their positions, including Board member Stephen Miran and New York Fed President John Williams.

Second, some hawkish members with voting rights will lose their voting rights next year—for example, the aforementioned Austan Goolsbee. Meanwhile, the representative of the dovish wing of the Fed, Neel Kashkari (Minneapolis Fed President), will become a voting member of the FOMC in 2026.

Finally, the dollar is losing ground ahead of key reports this week. Tuesday (December 16): Nonfarm payrolls will be published in the US, and on Thursday, the consumer price index will be published. Typically, these reports are released every 1.5-2 weeks, but due to the shutdown's consequences, NFP and CPI will "meet" in the same week.

This is quite symbolic, given the nature of disagreements among Fed members: some are concerned about inflation risks, while others focus on the labor market. If NFP and CPI come out in the "red zone," the dollar will come under additional (and significant) pressure, and EUR/USD buyers will not only manage to hold above the resistance level of 1.1750 (the upper line of Bollinger Bands on the D1) but will also test the next price barrier at 1.1800 (the upper line of Bollinger Bands on the W1). However, if these releases show a "green tone," sellers of EUR/USD will regain initiative and pull it down to the base of the 16th figure, with prospects for a decline to the support level of 1.1570 (the lower boundary of the Kumo cloud on the daily chart).

The stakes are too high, so traders of the pair are showing indecision despite the prevailing bullish sentiment. Under current conditions, it is advisable to consider long positions on downward pullbacks, with the "upper ceiling" of the price range remaining at 1.1750, above which EUR/USD buyers have been unable to establish themselves for the second consecutive week.