FX.co ★ EUR/USD

Technical and Fundamental Analysis of the EUR/USD Pair The euro posted steady gains against the U.S. dollar in Wednesday’s European trading, with EUR/USD climbing toward the upper edge of its recent consolidation band near 1.1750. The advance was largely fueled by a shift in market sentiment, as investors became more confident that tensions between the United States and Iran could ease in the near term. This improvement in risk appetite weakened demand for the safe-haven dollar, allowing the euro to strengthen. At the same time, firmer inflation-linked data from the euro area added momentum to the single currency, reinforcing expectations that the European Central Bank (ECB) could maintain a relatively firm policy stance. According to reports citing U.S. officials, Washington and Tehran are moving closer to a preliminary understanding designed to de-escalate the conflict and pave the way for renewed discussions over Iran’s nuclear program. This follows recent announcements from U.S. authorities suggesting a halt to certain military activities, including a pause in naval escort operations through the Strait of Hormuz. The pivot toward diplomacy has reduced immediate geopolitical risks, prompting investors to shift away from defensive positions and into currencies perceived to offer higher returns, such as the euro. From an economic standpoint, recent eurozone data have provided additional support for the currency. Producer prices recorded a strong rebound, signaling renewed inflationary pressures driven in part by elevated energy costs and supply-side disruptions. The data marked a sharp turnaround from earlier declines, strengthening the case that inflation remains a concern for policymakers. As a result, markets are increasingly pricing in the possibility of tighter monetary policy from the ECB in the coming months. Nevertheless, the broader economic picture remains mixed. The services sector across key economies—Germany, France, and Italy- continues to show contraction, highlighting persistent softness in demand and overall business activity. Technically, EUR/USD is hovering around the 1.1750 level, maintaining a mildly positive structure on higher timeframes while pausing after its recent upward move. On the H4 chart, a solid support base is visible between 1.1690 and 1.1720, where price action has consistently attracted buyers. This zone coincides with the 50-period Simple Moving Average (SMA), strengthening its role as a key dynamic support. As long as the price remains above this region, the broader upward bias is likely to stay intact. On the resistance side, a well-defined barrier stands between 1.1790 and 1.1820, where prior advances have been rejected. This zone represents a critical ceiling, and a confirmed breakout above it could open the door for further gains. The 20-period SMA on the H4 timeframe remains positioned above the 50 SMA, indicating continued bullish momentum, although the current proximity of price to this faster average suggests the market may consolidate or retrace slightly before attempting another push higher. Looking at the H1 timeframe, price action appears more compressed, reflecting short-term indecision. Immediate support is located around 1.1725–1.1740, while a stronger intraday floor is seen closer to 1.1700. Resistance remains concentrated in the 1.1770–1.1790 range, where selling pressure has repeatedly emerged. The alignment of the 20 and 50 SMAs on this timeframe still favors buyers, but without a clear break above resistance, the pair may continue to trade sideways in the near term. However, EUR/USD retains a cautiously bullish tone, supported by easing geopolitical tensions and a stable technical foundation. However, a decisive move above key resistance levels is still required to confirm a sustained continuation of the upward trend.