Over the past 24 to 48 hours, the EUR/USD pair exhibited notable volatility, climbing above the 1.1950 level and reaching around 1.1965 during the early Asian session yesterday. Compared to yesterday’s closing price of 1.19707, the market saw slight fluctuations but overall reflected a strengthening euro. The main drivers behind this movement were heightened uncertainty over U.S. trade policy and increasing concerns about the Federal Reserve’s independence, which weakened the dollar’s safe-haven appeal and boosted the euro.

Additionally, the European Central Bank’s (ECB) recent sensitivity to the euro approaching the 1.20 mark triggered internal market adjustments. Although the euro briefly broke through this psychological barrier, the ECB’s cautious signals caused a swift retreat, prompting traders to remain cautious. For investors, it’s akin to encountering an invisible barrier at the peak—the brief breakout met pressure, signaling the need to reassess market risks and profit expectations.

Overall, EUR/USD’s current trajectory reflects the combined influences of geopolitical and monetary policy uncertainties shaping the currency market. While presenting both opportunities and challenges, investors looking to capitalize should closely monitor U.S. trade policy developments, Fed actions, and the ECB’s policy cues to navigate the ongoing volatility with an informed strategy.

Daily Chart

The daily chart shows a steady uptrend for EURUSD since the start of the year. Prices remain above the 50-day and 200-day moving averages, sustaining a medium to long-term bullish momentum. The Bollinger Bands indicate the price touching the upper band, suggesting short-term resistance. MACD’s slow upward movement supports continued momentum but warns of potential deceleration and a risk for pullback.

1H Chart

The hourly chart over the past five days shows EURUSD oscillating around 1.1965, with short-term moving averages entwined but still favoring bulls. Price action is confined within Bollinger Bands, reflecting market indecision. A recent bearish engulfing candlestick suggests increased selling pressure in the short term. MACD is showing early signs of a bearish crossover, hinting at a possible near-term corrective phase.

Technical Trend:  Consolidative Bullish

Technically, EURUSD remains above its EMA averages on the daily chart, maintaining an overall bullish posture. However, the pressure near the upper Bollinger Band and a bearish engulfing pattern signal potential short-term correction. The hourly MACD and RSI indicate weakening momentum, while volume remains steady, suggesting consolidation or mild pullback ahead. Watch the 1.20 resistance level for a breakout signal and support at 1.19 for downside risk control.

Today’s focus is on the Eurozone and EU GDP, Consumer Price Index (CPI), and unemployment rate releases scheduled for the European morning session (around 17:30-19:00 HKT), which are highly relevant for EURUSD. Stronger-than-expected data could bolster the euro, while weaker results may tilt the scales towards the dollar. Later, the US Producer Price Index (PPI) data is due at 22:30 HKT, which will influence USD momentum and could affect EURUSD price movement.

Resistance & Support

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