The EUR/USD currency pair is experiencing a robust uptrend, with the latest traded price holding firm at 1.16617. The market displays strength and momentum as it continues to make higher highs and higher lows. This is particularly evident on the four-hour chart, where the price is trading above both the 50 SMA and the 200 SMA, indicating sustained upward movement. The significant support levels include 1.15807, marked by the 4H 50 SMA, and the recent swing low of 1.15367. Resistance is observed at the recent swing high of 1.16774, a crucial level for potential breakouts.
The chart reveals a noteworthy absence of classical patterns such as flags, wedges, or head-and-shoulders formations, indicating a straightforward bullish impulse following a range-bound move. The RSI reading stands at 59.52, suggesting strong bullish momentum approaching overbought territory but not yet extreme. Price action displays decisive buying with strong green candles and minimal rejection wicks, underscoring bullish confidence in the current market environment.
Fundamentally, the euro is supported by the European Central Bank’s cautious stance on rate cuts, a response to persistent inflation concerns across the eurozone. This cautionary approach lends strength to the euro, creating a favorable environment for appreciation against the U.S. dollar. Additionally, the recent U.S. Consumer Price Index (CPI) data came in slightly below expectations, contributing to a weaker dollar sentiment. Combined with positive EU Purchasing Managers’ Index (PMI) figures that remain above contraction levels, the euro is positioned for recovery, buoyed by improved sentiment and economic prospects.
The combined outlook for EUR/USD is bullish, driven by technical factors and influential economic indicators. The sustained uptrend indicates strong market confidence in the pair, supported by key moving averages and bullish momentum. With a break and close above the 1.16774 resistance likely confirming continuation, the focus shifts to higher targets. However, the bullish bias holds as long as the price remains above the 1.15807 support zone. Caution is advised for traders, as a close below this level could invalidate the current bullish outlook and signal potential reversal risks.
Overall, the current analysis highlights a market in favor of EUR strength supported by technical uptrends and strong fundamental drivers. Traders eyeing this pair should monitor key levels, particularly the 1.16774 resistance, as it signifies a critical zone for potential breakout and continuation of the rally. Meanwhile, keeping an eye on underlying fundamentals and potential macroeconomic developments will be essential for navigating future trends and managing trades effectively in this volatile environment.
