Bullish momentum fades: technical analysis signals EURUSD decline

The EURUSD rate strengthens amid US dollar weakness following the country’s credit rating downgrade. The current price is 1.1257. Discover more in our analysis for 20 May 2025.

EURUSD forecast: key trading points

• Moody’s downgraded the long-term US credit rating
• Atlanta Fed President confirmed expectations of one Federal Reserve rate cut in 2025
• EURUSD forecast for 20 May 2025: 1.1055

Fundamental analysis

The EURUSD rate has been rising for the second consecutive day, with buyers attempting to hold above the key resistance level of 1.1255, maintaining upward momentum as pressure on the US dollar intensifies.

The US currency continues to lose ground after Moody’s downgraded the US long-term credit rating. However, Treasury Secretary Scott Bessent called Moody’s decision a "lagging indicator," stating that the Trump administration would accelerate economic growth to offset rising budget spending. Market participants continue to sell off the US dollar. Nonetheless, the EURUSD forecast remains bearish.

Additional support for the euro comes from comments by Federal Reserve Bank of Atlanta President Raphael Bostic, who reiterated expectations for just one interest rate cut this year.

EURUSD technical analysis

The EURUSD rate is rising within the boundaries of a Wedge reversal pattern. Today’s EURUSD forecast anticipates a test of the pattern’s upper boundary, with a risk of reversal and potential decline towards 1.1055.

Technical signals indicate weakening bullish momentum: Moving Averages still suggest a prevailing downtrend, while the Stochastic Oscillator is reversing from overbought territory.

A breakout below the lower boundary of the Wedge pattern and consolidation below 1.1165 would confirm the end of the short-term rally and signal the formation of a bearish impulse.

Summary

The euro continues to rise as the US dollar weakens following Moody’s downgrade and Fed rate cut expectations. However, EURUSD technical analysis signals a possible end to the current rally and a correction towards 1.1055.