FX.co ★ EUR/USD

The EUR/USD currency pair maintains a powerful bullish bias, trading firmly above recent structural swing highs as market participants continue to liquidate U.S. Dollar positions following weaker-than-expected macroeconomic metrics out of the United States. The initial catalyst for this multi-week advance stems from dual liquidity sweeps below key structural swing lows, which effectively cleared out weak long positions before institutional order flow reclaimed control. Former resistance zones—notably the bearish fair value gap identified as Imbalance 17—have been completely invalidated by persistent buying pressure. Furthermore, price action throughout the week established two new bullish fair value gaps at Imbalance 20 and Imbalance 21, reinforcing strong lower-timeframe demand floors. Although price accelerated higher without offering an immediate retracement into these imbalances, the overarching market structure signals that the previous corrective phase has fully terminated, establishing buyers as the dominant force in the market. Fundamentally, the macroeconomic environment offers compelling tailwinds for the European single currency while suppressing demand for the Greenback. U.S. economic releases—highlighted by slowing Nonfarm Payrolls growth, decelerating GDP figures, and cooling consumer price inflation—have prompted traders to scale back expectations for Federal Reserve monetary policy tightening in September and the near future. Doubts regarding prospective monetary leadership under candidates like Kevin Warsh, paired with the U.S. Treasury's strategic expansion of long-term bond buyback operations, continue to weigh on U.S. sovereign yields and diminish international capital inflows into the dollar. Conversely, European economic releases have provided solid support; recent German and Eurozone business activity metrics largely outperformed analyst expectations, preserving the potential for European Central Bank policy tightening later this autumn. Even amidst ongoing geopolitical friction in the Middle East and energy supply concerns surrounding the Strait of Hormuz, safe-haven demand for the U.S. Dollar remains subdued as markets discount the likelihood of direct military escalation in favor of targeted sanctions.

From a technical chart perspective, EUR/USD exhibits an uninterrupted sequence of higher highs and higher lows, characterized by direct vertical expansion since late July with negligible corrective pullbacks. On the 4-hour timeframe, immediate structural support is anchored at the newly formed Imbalance 20 and Imbalance 21 demand blocks, which serve as primary retest targets in the event of short-term profit-taking. As long as price maintains its structural integrity above these newly validated imbalance zones, the broader path of least resistance points decisively upward toward primary upside objectives at 1.1797 and 1.1850. Looking at the immediate structural roadmap, 1.1797 represents the primary resistance threshold, where a confirmed breakout targets 1.1850 as the main extension objective. On the downside, Imbalances 20 and 21 act as the initial demand retest zone, while the lower sweep low provides secondary structural support. As long as EUR/USD maintains its daily closing structure above the key demand floor, the broader path of least resistance remains firmly oriented to the upside.