EUR/USD has witnessed a delicate tug-of-war battle over the past 24 to 48 hours. Yesterday’s close settled around 1.16285, with the market locked in fierce competition at the 1.1600 psychological level. Bulls attempted to breach the critical resistance zone of 1.1647-1.1630 but ultimately failed, causing price to retreat into neutral territory. This repetitive price action reflects deep disagreement among market participants regarding the policy outlook for both Europe and the United States central banks.

The fundamental driver of this consolidation is the Federal Reserve’s December rate cut probability now standing at 87%, making it essentially a done deal. Meanwhile, the European Central Bank faces a distinctly different policy dilemma—inflation data remains relatively stable, and declining energy prices provide a cushion. This policy divergence creates upside support for the euro. Markets now focus on critical eurozone labour market and consumer price index data that could determine the central bank’s next moves and subsequent euro movement.

From a technical perspective, EUR/USD has formed a symmetrical triangle consolidation pattern over recent weeks, with higher lows and lower highs gradually converging. Price currently hovers near 1.1600, positioned at the triangle’s midpoint, suggesting an imminent breakout is looming. If bulls successfully breach the 1.1650 resistance trend line, the euro could experience a more substantial rally, targeting the widest part of the triangle near 1.1700 or higher. Conversely, if sellers hold the line, prices could retest the psychological support at 1.1500, which has served as a critical defensive position since late November.

Notably, international investment bank Natixis has issued a clear signal, expecting EUR/USD to move higher into 2026, driven by dollar weakness stemming from fading capital inflows, softer US fundamentals, and the Federal Reserve’s upcoming easing cycle. This medium-term bullish outlook provides psychological support for near-term bulls. However, weak German retail sales data reveals challenges facing the European economy, which could limit euro’s upside.

At this stage, markets find themselves in an extremely sensitive transition period. Short-term investors should closely monitor any fluctuations in eurozone economic data and Federal Reserve policy signals. Once the Fed cuts rates as expected and any breakthrough in Ukraine-Russia negotiations materialize—which could further push down energy prices—these could become catalysts for EUR/USD to break above the triangle’s upper boundary.

Daily Chart

The daily chart of EURUSD shows a clear uptrend, with prices trading above the 200-day moving average at 1.1568 and the 50-day moving average at 1.1591, reflecting a strong bullish structure. The price has steadily climbed since the start of the month, breaking out from a wedge consolidation area. Bollinger Bands are widening, indicating increased volatility, while the MACD shows strengthening bullish momentum with the fast line above the slow line and an expanding green histogram. This trend is favorable for medium-to-long term holders looking for pullbacks as entry points.

1H Chart

In the recent 3-5 day hourly chart, EURUSD oscillates near 1.1600, maintaining levels above the short-term 20-hour moving average. The MACD is showing a bullish crossover with widening difference between the fast and slow lines, indicating strong short-term momentum. Multiple bullish engulfing candlesticks have appeared recently, highlighting increasing buying pressure. The Bollinger Bands are contracting, suggesting a likely breakout soon. Short-term traders should monitor key price levels between 1.1600 and 1.1650 closely.

Technical Trend: The trend is determined to be firmly bullish with a cautiously optimistic upward bias.

Technically, EURUSD’s breakout above the wedge resistance on the daily chart confirms the bullish trend. In the short term, bullish engulfing patterns and the MACD bullish crossover strengthen buying momentum. Volume should be watched carefully; a breakout accompanied by volume expansion will increase the likelihood of trend continuation. Traders should monitor price action around key support and resistance levels, paying close attention to the immediate impact of today’s economic releases to capitalize on high-probability trade setups.

Today, the Eurozone will release finalized Services PMI data expected around 53.1, close to the previous value; meanwhile, the European Central Bank President will deliver a speech. These events are significant for EURUSD, as hawkish data or comments could temporarily boost the euro, whereas dovish signals may trigger pullbacks. The U.S. ADP employment report is scheduled for later in the day, with a forecast of 5,000 jobs, down from 42,000 previously, which if missed, could also favor the euro. Overall, today’s economic events provide crucial cues for EURUSD trading decisions.

Resistance & Support

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