Over the past 24 to 48 hours, the EUR/USD pair showed slight volatility, closing yesterday at 1.15428, a minor decline from the previous day. The US Dollar Index failed to maintain above 100, retreating from two-month highs down to around 99, allowing the euro to bounce back against the dollar.

Market attention has recently shifted from the dollar’s strength to upcoming US inflation data. The dollar dipped as some investors took profits and geopolitical tensions in the Middle East, particularly between Iran and Israel, escalated. These factors have provided some relief to the euro. With the Federal Reserve’s hawkish stance still prevailing, the EUR/USD is oscillating in the 1.15 to 1.16 range amid ongoing uncertainty.

For the average investor, this means that while the dollar had surged on strong job and economic data, concerns about geopolitical risks and inflation expectations have led to a pullback, offering the euro some breathing room. Investors should closely watch the upcoming US inflation report, which is likely to be a key determinant of near-term market direction.

Daily Chart

The daily chart shows EURUSD transitioning from a weak phase to a bullish trend. After consolidating near the year’s low, recent price action surpassed short-term moving averages, forming a clear EMA bullish alignment indicating a medium-to-long term uptrend. The MACD histogram is contracting and suggests a bullish crossover of its signal lines, reflecting strengthening momentum. Bollinger Bands are expanding as price breaks above the middle band, signaling enhanced volatility and upside potential. Overall, the longer-term technical structure favors a bullish outlook, pending confirmation of higher highs.

1H Chart

The past 5 days’ hourly chart indicates EURUSD oscillating within 1.1520 to 1.1560. The price has found repeated support near the 20-hour moving average and recently broke above the 50-hour moving average, maintaining above the upper band of the Bollinger Bands. The MACD is positive and expanding, RSI is above 55, indicating bullish momentum in the short term. A rising flag pattern started earlier this week, signaling a possible strong breakout towards 1.1600 once the upper resistance is breached. A hammer candlestick with a long lower shadow appeared on key support, suggesting buying pressure strengthening.

Technical Trend:  Currently, the EURUSD trend is cautiously bullish, exhibiting a decisive upward momentum supported by robust technical setups.

Technically, EURUSD has strong potential to extend its rally given the bullish EMA alignment, MACD bullish crossover on the daily, and Bollinger Bands expansion. The hourly rising flag formation acts as a short-term consolidation before a probable upward breakout. The recent hammer candlestick on support confirms buyer interest and strengthens the base. Key technical focus should be on the 1.1600 resistance level as a critical breakout point that can pave way for higher highs.

Today’s GMT+1 economic calendar features several data points from Germany, China, and the US. German industrial production and trade balance came in steady, while consumer inflation slightly missed expectations, indicating resilient internal demand in the Eurozone. US trade balance and existing home sales were marginally better than forecast but do not directly impact inflation or rate expectations. Therefore, no major direct event today is likely to cause sharp EURUSD moves. Nonetheless, upcoming US inflation and labor data remain the primary focus for future price action.

Resistance & Support

Run a Live EURUSD Analysis

The above financial market data, quotes, charts, statistics, exchange rates, news, research, analysis, buy or sell ratings, financial education, and other information are for reference only. Before making any trades based on this information, you should consult independent professional advice to verify pricing data or obtain more detailed market information. 1uptick.com should not be regarded as soliciting any subscriber or visitor to execute any trade. You are solely responsible for all of your own trading decisions.