Over the past 24 to 48 hours, EUR/USD has shown notable volatility, closing around 1.1847, slightly below the previous close of 1.18536. The recent strength of the US dollar has been a primary driver of the euro’s decline against the dollar. Market analysis highlights a continuing struggle with risk appetite this week, which has boosted demand for the US dollar and indirectly weighed on the euro.

Market attention is sharply focused on the upcoming Federal Reserve minutes, with investors maintaining a cautious stance and EUR/USD trading within a narrow range between 1.18 and 1.19. Furthermore, Goldman Sachs remains bullish on the euro’s long-term outlook, expecting further upside as the dollar broadly weakens. Nevertheless, in the short term, the currency pair faces pressure linked to dollar strength, particularly as the US Dollar Index (DXY) consolidates near the 97 level, injecting additional market volatility.

For the average investor, this environment resembles waiting before a key decision — market sentiment is cautious and uncertainty prevails. This scenario underscores the importance of closely monitoring upcoming economic releases and central bank policy, which could significantly influence the direction of the EUR/USD exchange rate once more.

Daily Chart

The daily chart shows EURUSD retracing from earlier highs this year, hovering close to both the 50-day and 200-day moving averages – critical support zones. The Bollinger Bands have tightened, indicating reduced volatility, while MACD is signaling waning bearish momentum, hinting at a possible trend reversal. The medium-term trend still favors bulls, but confirmation via a clear breakout is required to sustain upward momentum.

1H Chart

The hourly chart of the past 3-5 days exhibits increased volatility with a symmetrical triangle consolidating around 1.1820. Short-term moving averages are converging, marking an indecisive trend. Bollinger Bands show expansion potential, underscoring an imminent breakout, while the MACD recently formed a bullish crossover. RSI remains mildly bullish, suggesting strengthening momentum and a potential short-term buying opportunity.

Technical Trend:  EURUSD currently trades in a cautiously bullish consolidation phase, with increased short-term volatility and a positive medium-term trend outlook.

Technically, the MACD bullish crossover combined with a moderately bullish RSI points to rising buying pressure in the near term. The narrowing Bollinger Bands on the daily timeframe signal upcoming volatility expansion, so traders should watch for breakout direction closely. The cluster of support around 1.1800-1.1820 is the critical defense zone. Holding this level alongside dovish FOMC signals may rapidly accelerate bullish momentum.

Today’s economic calendar highlights the US FOMC Minutes release at 20:00 GMT+1 as the most significant event for EURUSD. The minutes may cause heightened USD volatility: a hawkish tone would bolster the USD and pressure EURUSD lower, whereas a dovish interpretation could support Euro gains. Earlier Japanese and European data releases have lesser direct impact on the EURUSD pair today.

Resistance & Support

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