FX.co ★ EUR/USD

Macro Drivers Keep EUR/USD Under Pressure The spot price is trading near 1.1370, remaining on the defensive as the U.S. Dollar continues to benefit from resilient U.S. economic data, elevated Treasury yields, and renewed safe-haven demand. Recent market sentiment has been dominated by expectations surrounding the upcoming Federal Reserve meeting, where policymakers are widely expected to keep rates unchanged while maintaining a restrictive stance due to persistent inflation risks, particularly from higher energy prices. Meanwhile, the European Central Bank also left interest rates unchanged but signaled that another rate increase remains possible if inflation accelerates again. ECB President Christine Lagarde acknowledged that rising energy costs are creating renewed upside risks to inflation, although growth remains fragile across the Eurozone. Stronger-than-expected German and Eurozone PMI figures provided temporary support for the euro. Still, geopolitical tensions in the Middle East, firmer oil prices, and expectations of relatively tighter Fed policy have continued to favor the dollar. Markets are also closely monitoring upcoming U.S. inflation and employment releases for further clues on the Fed's policy path. Chart Structure Signals Sellers Still Hold Control The daily charts continue to display a mildly bearish structure. After failing to sustain gains above the 1.1480 resistance area earlier this month, EUR/USD has produced a sequence of lower highs while trading below its medium-term moving averages, indicating weakening upside momentum. Price action remains confined within Friday's range of approximately 1.1365–1.1401, with immediate resistance now located at 1.1400, followed by 1.1445 and the stronger 1.1480 barrier. Initial support is found at 1.1360, with additional downside levels near 1.1325, which represents the recent yearly low. The Commodity Channel Index (CCI) remains in negative territory, reflecting persistent bearish momentum despite occasional intraday rebounds. Heiken Ashi candles continue to print predominantly bearish bodies on the H4 timeframe, suggesting sellers remain in control while buying pressure lacks conviction. Technical conditions therefore continue to favor selling rallies rather than chasing breakouts until a decisive recovery above the 1.1480 region occurs.

Momentum indicators suggest that downside risks remain slightly greater than upside potential over the short term. The pair is currently consolidating around 1.1370, and unless buyers reclaim 1.1400–1.1420, the broader bearish bias is likely to remain intact. A realistic short-term strategy would be to look for selling opportunities on rebounds toward 1.1395–1.1410, where previous resistance and moving-average confluence may attract fresh sellers. A protective stop above 1.1455 would leave room for normal market volatility while targeting an initial decline toward 1.1330, with an extension to 1.1300 if U.S. economic data continue to surprise on the upside. Conversely, a sustained break above 1.1445 would weaken the bearish outlook. It could trigger a recovery toward 1.1480 and 1.1520, particularly if incoming Eurozone data outperform expectations or Fed officials adopt a less hawkish tone. For now, however, institutional positioning continues to favor the U.S. Dollar, keeping rallies in EUR/USD vulnerable to renewed selling pressure. Trading Recommendation: Short-term (Bearish Bias): Consider selling near 1.1395–1.1410, with a stop-loss at 1.1455 and take-profit at 1.1330, extending to 1.1300 if bearish momentum accelerates. Exit the trade early if price closes decisively above 1.1445. Long-term (Bullish Recovery Scenario): Consider buying only after a confirmed breakout above 1.1450, with an entry at 1.1455, stop-loss at 1.1390, and take-profit at 1.1520, extending toward 1.1580 if improving Eurozone fundamentals or a softer Fed outlook shift market sentiment in favor of the euro.