EUR/USD Analysis Summary Today
- Overall Trend: Neutral, with a slight upward bias.
- Support Levels: 1.1680 – 1.1600 – 1.1540
- Resistance Levels: 1.1750 – 1.1810 -1.1880
EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1620, with a target of 1.1800 and a stop-loss at 1.1570.
- Sell EUR/USD from the resistance level of 1.1810, with a target of 1.1600 and a stop-loss at 1.1880.
Technical Analysis of EUR/USD Today:
As you can see, the EUR/USD pair is trending higher within a newly formed ascending channel pattern. The EUR/USD pair is currently testing key Fibonacci retracement levels that could determine its next direction. The price recently retreated from its highs near 1.1776 and is now approaching potential support around the trend correction levels. Overall, the Fibonacci retracement tool reveals several key levels that buyers may be waiting to join the uptrend.
The 38.2% Fibonacci retracement level at 1.1719 appears to offer initial support, while the 50% retracement level at 1.1701 closely aligns with the lower boundary of the ascending channel. A deeper correction might test the 61.8% Fibonacci level at 1.1683, which represents a larger pullback but could maintain the overall bullish structure if it holds. If any of these Fibonacci levels successfully contain the current decline, the EUR/USD pair may resume its rise toward the swing high near the top of the channel at 1.1776 or other potential higher targets.
The moving average structure also appears to support further upward momentum, with short-term indicators positioned above their long-term counterparts. This formation confirms that the stronger trend remains upward, provided key support areas hold. However, momentum indicators are showing mixed signals. The Stochastic appears to be exiting the oversold zone, which could indicate that selling pressure is beginning to fade and buyers may be preparing to return. This development is consistent with a bullish pullback scenario.
The Relative Strength Index also appears to be stabilizing after reaching oversold levels, suggesting that a correction may be nearing completion. Any rise from current levels would enhance the likelihood of a continued trend towards the top of the channel.
Trading Tips:
Traders are advised to wait for the reaction to the announcement of U.S. inflation numbers and the European Central Bank (ECB) announcement this week to determine the most suitable EUR/USD trades. My preference is still to sell on every strong upward rebound.
EUR/USD trading will be affected by the ECB’s decision tomorrow, Thursday. A neutral or hawkish statement could allow the uptrend to resume. On the other hand, a cautious tone in the statement or press conference could push the price below support areas. Additionally, the release of the U.S. Consumer Price Index (CPI) at 3:30 PM (Egypt time) could affect U.S. dollar trends, as a weak reading could strengthen expectations for monetary easing by the Federal Reserve.
EUR/USD Forecast Amid European Political Concerns
This week’s EUR/USD forecast is swaying between European politics and a weak U.S. economy. At the start of this week’s trading on reliable trading platforms, the pair settled above 1.1700 after last week’s weak jobs report, but traders remain cautious ahead of a no-confidence vote in France, which could lead to new elections. While political risks are casting a shadow over the euro, the U.S. labor market remains the primary driver, with Federal Reserve interest rate cuts seen as inevitable, and the EUR/USD pair is expected to rise by the end of the year.
According to forex trading experts, the no-confidence vote in the French government will be a significant short-term issue, although the U.S. economy is likely to remain dominant in overall dollar movements. Currently, the dollar’s sentiment remains weak amid expectations of Fed rate cuts, but the French vote has increased caution.
According to experts, there appears to be potential for further volatility in the 1.1650-1.1750 range for the EUR/USD pair this week. Also, we doubt Thursday’s European Central Bank meeting will be a major market driver. Credit Agricole sees a risk of the EUR/USD pair falling above 1.1650 in the event of new elections. However, MUFG expects the US dollar to decline in the medium term, and the divergence in policy between the European Central Bank and the US Federal Reserve towards the end of the year supports our expectations of a rise in the EUR/USD pair above the psychological resistance level of 1.2000.
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