EUR/USD Analysis Summary Today
- Overall Trend: Bullish.
- Support Levels: 1.1760 – 1.1690 – 1.1600
- Resistance Levels: 1.1825 – 1.1890 – 1.1940
EUR/USD Trading Signals:
- Buy: Buy EUR/USD from the support level of 1.1690, with a target of 1.1800 and a stop-loss at 1.1630.
- Sell: Sell EUR/USD from the resistance level of 1.1850, with a target of 1.1600 and a stop-loss at 1.1920.
Technical Analysis of EUR/USD Today:
Amid a positive upward momentum, the EUR/USD pair is facing resistance, but the U.S. Federal Reserve has the potential to pave the way for new gains. According to reliable trading platforms, the EUR/USD exchange rate is still influenced by the 1.1785 resistance level. Regular followers will note that this is the 78.6% Fibonacci retracement level from the July decline.
Overall, breaking this level has proven difficult for euro traders, and the weekly forecast report predicted that the resistance would continue to yield disappointing gains. This prediction was ultimately correct. However, the chart shows continued upward momentum, with the EUR/USD pair trading above its nine-day exponential moving average. In fact, the EUR/USD pair is crossing all of its moving averages, indicating that it is on its way up and that periods of weakness are merely periods of stabilization.
The exchange rate could rise this week if the Federal Reserve continues to cut U.S. interest rates and market expectations for additional cuts in the coming months are met. If so, the EUR/USD pair could test the 1.18000 resistance level before reaching its 2025 high of 1.1830 later this year and then the more significant psychological resistance of 1.2000, which would confirm a stronger bull run and potentially push technical indicators into overbought territory.
For this bullish scenario to happen, the U.S. Federal Reserve must signal its willingness to make up to four or five additional cuts before mid-2026. Thererfore, this would be required to meet current market pricing and would be consistent with the ongoing erosion of the U.S. dollar’s value.
Overall, after a few frustrating months for U.S. dollar bears, we believe the dollar will resume its decline. According to some forex currency trading experts, the Fed’s imminent rate cuts are expected to trigger a new wave of decline for the U.S. dollar’s price. However, some analysts warn that a new catalyst is needed to break out of the summer ranges.
Their argument is that much of the future Fed rate cuts are already “priced in,” which means there is a very high barrier to overcome to trigger more weakness. With expectations of three 25-basis-point U.S. rate cuts by the end of the year—starting with this week’s Fed meeting—and about 150 basis points by the end of next year, U.S. employment statistics would have to see even bigger drops for monetary policy to enter an easing phase, which is not easy to exceed, according to forecasts. With that in mind, we wonder if there is room for market disappointment from a more cautious Fed decision mid-week. In that case, the U.S. dollar would rise, and the EUR/USD pair would remain constrained by the annoying 71.8% Fibonacci level we mentioned earlier.
Trading Advice:
Traders are advised to be patient and wait for the currency markets’ reaction to the U.S. Federal Reserve’s announcement, which is expected to cause strong and volatile price movements.
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