Over the past 24 to 48 hours, the EUR/USD pair exhibited notable volatility, rebounding slightly from yesterday’s closing price of 1.15378 to levels around 1.1560. Rabobank analysts forecast that the euro-dollar rate may remain volatile within the 1.15 to 1.16 range for months ahead, driven by fading expectations for further Fed hikes offset by persistent safe-haven demand for the US dollar.

Meanwhile, the market is keenly awaiting the July Consumer Price Index (CPI) report, with core inflation expected to ease to 3.4%, a crucial factor influencing the dollar’s trajectory. Softer US jobs data recently fueled market hopes for a Federal Reserve rate cut, which propelled EUR/USD past 1.1560, triggering a sharp short-term rally.

For the average investor, this dynamic can be viewed as a tug-of-war between safe-haven flows and interest rate expectations. With mixed economic signals and geopolitical concerns, the euro is likely to trade in a sideways pattern in the near term. Buying on dips appears to offer a tactical edge but investors should remain cautious as the dollar could reassert strength amid global uncertainties.

Daily Chart

On the daily chart, EURUSD shows a consolidation pattern within a range bound by 1.1495 support and 1.1560 resistance. Price has pulled back from the early-year high near 1.20236 and remains capped below the 200-day moving average (~1.16259), while the 50-day average (~1.14687) provides support. Bollinger Bands have narrowed, signaling reduced volatility, and the MACD oscillates near zero, indicating a lack of clear directional momentum, consistent with a sideways trend.

1H Chart

The hourly chart over the last five sessions indicates sessions fluctuate between 1.15314 and 1.15808. Short-term exponential moving averages (EMAs) demonstrate a bullish alignment, with the 8-period EMA crossing above the 21-period EMA, supporting short-term upside momentum. The MACD has recently crossed upwards with increasing momentum, suggesting the potential for further gains within the next 24-48 hours. Be wary at the 1.1560 resistance, which may prompt profit-taking or reversal.

Technical Trend:  The current trend is best described as ‘cautiously optimistic sideways’ with short-term bullish momentum developing, but overall range-bound awaiting a breakout confirmation above 1.1560 for a trend shift higher.

Technically, the daily chart shows EURUSD forming an expanding wedge pattern starting early August, which typically signals a potential breakout once price breaches key levels. The short-term bullish MACD crossover and EMA alignment on the hourly chart reinforce a near-term buying opportunity. The recent bullish engulfing candlestick further supports upward momentum over the next day. Nonetheless, 1.1560 remains a key resistance level; failure to break above could see prices retesting strong support near 1.1495.

Today’s economic calendar highlights Eurozone data releases at 11:00 including preliminary Q2 GDP revisions and June trade balance figures, which could influence EURUSD sentiment depending on their alignment with forecasts. Positive surprises here would likely boost the euro. Additionally, US retail sales data at 14:30 GMT+1 remains important for the USD outlook; stronger-than-expected readings would support the dollar, potentially pressuring EURUSD lower, while weaker data could favor euro advances. No extreme events are scheduled, suggesting price moves will hinge on these core releases.

Resistance & Support

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