Over the past 24 to 48 hours, the EUR/USD currency pair has shown stable yet challenging movement. The pair closed yesterday at 1.16724, a slight dip of 0.0259% from the previous day. Recently, the euro found solid support near the 1.1650 level, signaling a resurgence in market confidence and suggesting that bulls are gathering momentum for a potential upside breakout.

At the heart of this market dynamic is U.S. fiscal policy and its pressure on the dollar. According to SocGen analysis, the U.S. Treasury’s stance has kept the dollar weaker than what underlying economic fundamentals would warrant. This has left the U.S. Dollar Index (DXY) under persistent pressure, indirectly supporting the euro and other major currencies. Until the Federal Reserve signals a clear slowdown, this dollar weakness creates an asymmetric risk environment encouraging investors to favor the euro.

For the average investor, this scenario can be likened to an engine that is temporarily less powerful at a crucial moment, shifting attention to another engine performing more aggressively. In other words, U.S. fiscal policy has caused the dollar to lose some of its prior momentum temporarily, giving the euro a chance to catch its breath and rebound. While this dynamic might not drastically change the trend in the short term, it certainly provides a solid foundation for the euro bulls to hold the 1.1650 mark and build towards a potential rally ahead.

Daily Chart

The daily chart shows EURUSD maintaining a moderate uptrend from the 1.1650 support zone. The 50-day and 200-day moving averages have formed a golden cross, supporting bullish momentum. Bollinger Bands are contracting indicating reduced volatility and a consolidation phase. MACD is in positive territory with expanding separation between signal lines, reinforcing the medium to long-term bullish bias. The technical setup supports continued price stability above 1.1650 with potential for further upside, contingent on macroeconomic developments.

1H Chart

Hourly chart analysis over the past 3-5 days reveals EURUSD rebounding from the 1.1650 support level, encountering short-term resistance near 1.1700. Short-term moving averages (20 and 50-hour) are intertwined, signaling a sideways consolidation pattern. Bollinger Bands have slightly expanded, indicating a potential directional breakout. MACD has formed a bullish crossover near the zero line, suggesting increasing short-term momentum, but confirmation requires a clean break above the 1.1700 resistance.

Technical Trend:  Trend Direction: Cautiously Bullish Consolidation

The key technical insight lies in the hourly MACD bullish crossover combined with the daily chart’s golden cross between the 50-day and 200-day moving averages. This suggests a high-probability setup for renewed upside momentum. The firm support at 1.1650 forms a solid base from which prices may accelerate higher. Recent candlestick patterns include a bullish engulfing formation yesterday, indicating strong buying interest in the next 24 hours. Traders should monitor the 1.1700 resistance closely for breakout confirmation.

Today’s GMT+1 economic calendar highlights several important U.S. data releases at 14:30, including July Personal Consumption Expenditures (PCE) and Core PCE figures. These releases are critical as they frequently influence the USD’s strength and thus EURUSD price action. Expected moderate increases in these figures could temporarily support the USD, putting some pressure on EURUSD. Conversely, weaker-than-expected results may encourage further EURUSD gains. Other releases, such as Australia’s CPI and U.K.’s CBI Realized Sales, have limited direct impact on EURUSD today.

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.