Over the past 24 to 48 hours, the EUR/USD pair has shown a notable decline, slipping slightly from yesterday’s closing price around 1.1779, primarily driven by the European Central Bank (ECB) holding interest rates steady, which sparked risk-off flows and strengthened the US dollar. Despite recent softer inflation data in the Eurozone, which split market expectations between hikes and cuts later in 2026, the ECB’s lack of decisive hawkish signals has left the euro lacking upward momentum.

Reports indicate that last week’s euro rally was more a result of options market liquidity dislocations than fundamental shifts. Additionally, the hawkish tone from the Fed, especially rising odds of Kevin Warsh becoming the next Fed chair, has bolstered the dollar, reversing the euro’s gains and pushing EUR/USD back down. For the average investor, this means the euro could remain under pressure in the short term amid policy uncertainty and rising global risk aversion, urging caution in euro-related holdings due to potential volatility.

Daily Chart

On the daily chart, EURUSD has been gradually rising since early January, breaking above the 1.17 mid-term resistance level but currently consolidating near recent highs amid ECB’s rate hold. The 50-day moving average around 1.174 offers solid support, with the 200-day near 1.167. Bollinger Bands are tightening, indicating reduced volatility. The MACD hovers near the zero line, showing lack of strong momentum, suggesting a consolidation phase with a mildly bullish bias for the medium term.

1H Chart

In the hourly chart over the last 3-5 days, EURUSD has formed a clear descending channel from about 1.183 down to 1.177. Price attempts to break above the Bollinger mid-band were rejected. The MACD shows a bearish crossover while RSI remains below 50, pointing to bearish short-term momentum. Watch for support near 1.176 – a break below could open the door to deeper pullbacks.

Technical Trend:  Short-term trend: cautiously bearish; Medium to long-term trend: consolidating with bullish potential.

Technically, EURUSD has established a short-term descending channel, with the daily trend still mildly bullish but hourly momentum turning bearish. The MACD crossover and RSI levels point to increased selling pressure. Key support at 1.1760 will be critical; a break below could target 1.1700. The tightening Bollinger Bands signal an imminent breakout. Traders should be cautious and wait for decisive signals before taking action.

Today’s key European economic data include German industrial production and trade balance releases at 08:00 GMT+1. The industrial output is forecasted to decline slightly by 0.3% month-over-month, while the trade surplus is expected to widen to 14.1 billion euros, offering moderate support to the euro. There are no other major events likely to cause significant EURUSD volatility today. Attention should also be paid to the US Michigan consumer sentiment at 16:00 GMT+1, which could sway dollar direction and indirectly impact EURUSD.

Resistance & Support

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