FOREX Fundamental analysis for EUR/USD on December 5, 2024For the first time since 1962, the French National Assembly dismissed the government. Although this event was an important political milestone, it did not turn into a disaster for the euro. France is facing a period of uncertainty - the dissolution of parliament is impossible, the appointment of a new prime minister is associated with high risks, and the president has no plans to resign. Despite expectations of a vote of no confidence in Michel Barnier and his cabinet, the EUR/USD collapse did not occur.Even against the background of the political crisis and the growth of the French and German bond yield differential to the highest since 2012, the volatility of currency pairs with the euro remains moderate. Investors do not assume France's exit from the Eurozone (Frexit) or the collapse of the Euroblock. So far, they prefer to observe the development of events and are in no hurry to draw serious conclusions.The Fed's actions and their impact on the dollarA similar wait-and-see tactic is evident in the actions of the US Federal Reserve. The head of the Federal Reserve, Jerome Powell, noted that the US economy is feeling better than at the beginning of the monetary policy easing cycle. At that time, the Fed sought to support the labor market, but fears about its "freezing" did not materialize.However, market expectations of a possible pause in rate cuts have not been confirmed. Powell did not give such signals as, for example, his colleagues Alberto Musalem from the St. Louis Federal Reserve or Mary Daly from the San Francisco Federal Reserve. As a result, the forex trading method "buy a dollar on rumors, sell on facts" played a role, and EUR/USD grew.Dynamics of euro volatilityAccording to OECD forecasts, the Fed may cut the rate to 3.25% by the first quarter of 2026, which is lower than current expectations for derivatives (3.75–4%). At the same time, the ECB is likely to soften its rate to only 2%, and not to 1.5–1.75%, as investors expect. These differences, along with an improvement in the forecast of global GDP growth for 2025 from 3.2% to 3.3%, create support for the euro.EUR/USD forecasts for December and the impact of the seasonThe OECD also warns that protectionist measures such as Donald Trump's tariffs could slow global economic growth. While these duties have not been earned, the euro has a chance of growth, especially given the seasonally weak dynamics of the dollar in December.The catalyst for the growth of EUR/USD may be disappointing US employment statistics for November or profit-taking on short positions. As in the case of the political crisis in France or Powell's statement, moderate data may push the euro up. A breakout of the $1,054 pivot level looks increasingly likely, but in the current conditions it is preferable to stay out of the market, observing the development of the situation.EUR/USD Technical analysisYesterday, EUR/USD tested the 1.0477 support. This level was held by sellers, as a result of which the pair moved to strengthen in the American trading session. As part of this growth, the maximum was updated on December 3, which formed another buying pattern. Today, the short-term uptrend may continue. The target is around the 1.0597 level. After working out this target, we will observe the border of the upper Target zone 1.0636 - 1.0608. If the bulls are successful, the next growth target will be the Gold Zone 1.0709 - 1.0700.To change the direction of the trend and switch to sales, the bears need to break through the 1.0445 level and consolidate below. In this case, from the next trading day, it will be possible to consider selling EUR/USD with the main target in the area of the lower Target zone 1.0321 - 1.0293.