Over the past 24 to 48 hours, the EUR/USD currency pair has experienced notable volatility, with the price slightly dipping from yesterday’s close at 1.1632 to around the 1.1600 level. This movement was primarily influenced by recent market news, particularly the ECB’s softer guidance and strong US economic data weakening expectations for a Fed rate cut.

Latest reports highlight that the US Dollar Index (DXY) has continued strengthening since the start of the year, placing temporary pressure on the euro. Robust US labor data has diminished hopes for Fed easing, causing downward pressure on the EUR/USD pair. This indicates that investors are currently favoring holding the dollar amid steady economic data, intensifying downside risks for EUR/USD.

For the average investor, this situation can be seen as a race where the dollar, supported by recent economic strength, takes the lead, momentarily pulling ahead of the euro. Investors should monitor the upcoming economic calendar and central bank guidance closely, as these could shift the current market momentum in the near term.

Daily Chart

The daily chart shows EURUSD consolidating within the 1.16 to 1.17 range, characterized by sideways movement. The 50-day moving average near 1.1674 acts as resistance, while the 200-day moving average around 1.1646 provides support, indicating a guarded medium-term bullish base. Bollinger Bands are contracting, signaling reduced volatility and a market awaiting catalyst. MACD histogram is shrinking, pointing to waning momentum and a lack of clear trend on the daily timeframe.

1H Chart

Hourly charts over the past 3-5 days reveal heightened short-term volatility. Price swings between 1.1578 and 1.1637 highlight failed attempts to decisively break above the 1.16 level. Bollinger Bands have narrowed, with prices repeatedly testing the upper band, suggesting a sideways-biased weakness. The MACD and signal lines are near a crossover, and RSI hovers around neutral, indicating consolidation until fresh momentum emerges. Notably, a small bearish flag pattern has formed, implying possible downside continuation if support fails.

Technical Trend:  The current trend is best described as a cautiously bearish consolidation. Short-term momentum leans downward, though bulls remain defensively positioned. Market participants should watch how key support levels respond to gauge the next directional move.

Key technical insights include: 1. Daily moving averages compressing into a zone of resistance and support, signifying indecision; 2. The hourly bearish flag pattern signals a possible breakdown below 1.1578. Yesterday’s bearish engulfing candlestick indicates rising short-term selling pressure, warning of potential retracement. Combined with weakening MACD momentum and tightening Bollinger Bands, this suggests EURUSD may continue to test lower support levels.

Today’s GMT+1 economic calendar features the Eurogroup Meeting without set time or forecasted data, representing a neutral event. Japanese November machinery orders underperformed expectations at -11% vs. -5.2% forecast, but its impact on EURUSD is minimal in the short term. Overall, no major economic events directly affecting EURUSD price action are scheduled today, though upcoming inflation data should be monitored closely.

Resistance & Support

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