At the start of the new week, the EUR/USD pair showed positive momentum, reaching nearly a one-month high around 1.0525–1.0530 during the Asian session. This movement is supported by a renewed selling trend in the US dollar and the conservative victory in Germany's elections, both of which contribute to euro strength.
Given that oscillators on the daily chart have started gaining positive momentum and are expected to continue, a sustained breakout above 1.0530, followed by a breach of the 100-day Simple Moving Average (SMA) around 1.0545, would act as a trigger for further gains. This could drive EUR/USD towards the psychological level of 1.0600, followed by the December high near 1.0630. Further upside could see the pair targeting 1.0700, while before testing 1.0800, the pair would need to overcome resistance around 1.0754, which aligns with the 200-day SMA.
Conversely, if the pair fails to hold above the psychological level of 1.0500, buyers may step in around 1.0450, which could limit the downside to the 1.0420-1.0415 range. However, a break below 1.0400, followed by a breach of the 50-day SMA, could accelerate declines towards the interim support at 1.0340, with the next key round level at 1.0300.
A convincing breakdown below 1.0300 would shift the short-term outlook in favor of the bears, making EUR/USD more vulnerable to a decline towards the 1.0250–1.0260 region. Ultimately, spot prices could weaken further, dropping below 1.0200 and testing the November 2022 lows around 1.0173.
