• EUR/USD kicks off the new week on a positive note amid the prevalent USD selling.
• Bets for another Fed rate cut move in December continue to undermine the buck.
• Relatively hawkish ECB expectations benefit the EUR and also support spot prices.

The EUR/USD pair regains positive traction at the start of a new week and climbs back above the 1.1600 round figure during the Asian session. Bulls now await a move beyond a technically significant 50-day Simple Moving Average (SMA) before placing fresh bets and positioning for an extension of a one-week-old uptrend amid the prevalent US Dollar (USD) selling bias.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, languishes near a two-week low on the back of dovish Federal Reserve (Fed) expectations. In fact, traders ramped up their bets that the US central bank will lower borrowing costs again in December in the wake of the recent comments from several Fed officials. This, along with the underlying bullish sentiment around the financial markets, is seen undermining the safe-haven buck and acting as a tailwind for the EUR/USD pair.

The shared currency, on the other hand, continues to draw support from the growing acceptance that the European Central Bank (ECB) is done cutting interest rates. In fact, the latest ECB meeting minutes released on Friday showed unanimous backing for leaving all three key policy rates unchanged in October. Moreover, the Governing Council described the policy stance as being in a good place. Traders have now almost fully priced out any additional rate cut in 2025and see around a 40% chance of a move by the end of 2026.

This, in turn, lends additional support to the EUR/USD pair and backs the case for a further appreciating move in the near term. A sustained break through the 50-day SMA will reaffirm the constructive outlook and pave the way for further gains. Traders now look forward to this week's important US macro data, scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later today. In the meantime, the final Eurozone PMIs might provide some impetus to the EUR/USD pair.

(This story was corrected on December 1 at 07:04 GMT to say in the title, the first and the last paragraphs, that the EUR/USD pair flirts with 50-day Simple Moving Average (SMA), not 200-day SMA.)