EUR/USD Holds 1.18 as Dollar Weakens on US GDP Miss, Fed Cut Bets

EUR/USD maintains strength near 1.1800, gaining 0.5% (60 pips) as the dollar index futures dropped 0.8% following disappointing US economic data. US GDP growth came in at 4.3%, missing consensus estimates and fueling speculation of potential Fed rate cuts in 2026. Market pricing now shows a 65% probability of at least one 25-basis-point cut by mid-2026, compared to 45% last week. The euro found additional support from improving risk sentiment and stable European economic indicators. Technical analysis shows strong support at 1.1750 (50-day MA) with resistance at 1.1850 (November high). The dollar index broke below the key 104.00 level, its lowest since early December. Near-term EUR/USD momentum remains bullish above 1.1750, with potential acceleration toward 1.1900 if US data continues to disappoint and Fed cut expectations solidify.