FX.co ★ EUR/USD

The EUR/USD currency pair has maintained a decisive upward trajectory over the past month, driven by a resilient technical framework and reinforced by shifting macroeconomic fundamentals. This primary bullish trend initially gained significant momentum following two distinct liquidity sweeps off key swing lows on the daily chart, effectively clearing out short-side liquidity and establishing a firm dynamic floor for buyers. Over the past week of trading, price action has carved out two vital bullish demand zones, identified as Imbalance 20 and Imbalance 21. Imbalance 21, spanning approximately 80 pips down toward the key 1.1589 support threshold, represents a major area of structural interest for institutional buyers. Although market movement over the last six trading sessions has been characterized by narrow intraday ranges and subdued trading volumes, the pair has effectively tested the upper boundary of Imbalance 21. This extended consolidation phase sets the stage for a confirmed bullish reversal reaction or a potential invalidation, which would dictate the next multi-week directional bias. From a fundamental standpoint, macroeconomic forces continue to align overwhelmingly in favor of euro bulls while placing persistent pressure on the U.S. Dollar. Market expectations regarding Federal Reserve monetary policy under Chair Kevin Warsh have shifted dramatically following a string of disappointing U.S. economic indicators, including softening Nonfarm Payrolls figures, decelerating Consumer Price Index readings, and slowing GDP growth. These weak data points have eroded market confidence in potential Fed rate hikes, reversing the dollar-supportive environment seen earlier in the summer. Furthermore, the U.S. Treasury's decision to expand its long-term bond buyback program has added excess liquidity to the market, diminishing structural demand for the Greenback. On the geopolitical front, active escalation in the Middle East has transitioned into economic sanctions and trade standoffs, stripping the U.S. Dollar of its safe-haven premium. Combined with potential trade friction involving major trade partners like Canada and China, as well as lingering hawkish sentiment from the European Central Bank regarding autumn policy moves, the Greenback lacks robust fundamental drivers to sustain a meaningful rally. From a structural trend perspective, the higher-timeframe technical sequence confirms that buyers remain in clear control of market directional bias. The previous bearish Imbalance 17 was thoroughly tested and subsequently invalidated due to an complete lack of follow-through selling, signaling that bear attacks lack structural backing. Meanwhile, the untested bullish Imbalance 19 and the newly formed Imbalance 20 provide layers of underlying demand beneath current price action, serving as secondary support buffers should deeper pullbacks materialize. Imbalance 21 remains the primary accumulation zone where traders are looking for lower-timeframe bullish confirmation patterns before committing long positions. As long as daily candle closes maintain structural integrity above the 1.1589 invalidation level, the broader market structure remains decisively bullish, pointing directly toward primary upside expansion targets at 1.1797 and 1.1850. Looking ahead to upcoming market catalysts, trading activity is expected to break out of its recent quiet consolidation as high-impact risk events unfold. The macroeconomic backdrop features significant volatility drivers, including the annual U.S. Nonfarm Payrolls benchmark revision and Chair Warsh's speech at the Jackson Hole Economic Symposium. These calendar events are poised to inject substantial volume into the foreign exchange market, providing the necessary catalyst to resolve the current range-bound behavior. A dovish tone from central bank officials or further downside revisions to U.S. labor data would likely trigger an aggressive bullish reaction out of Imbalance 21, launching the next impulsive leg higher toward multi-month resistance levels while keeping bearish prospects strictly limited.