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The euro is attempting a modest rebound as EUR/USD climbs to 1.1589, lifting back above short-term moving averages and signalling early signs of bullish momentum. While the pair remains inside a broader consolidation, momentum indicators are improving — raising the possibility that the euro may be gearing up for a breakout attempt in the coming days.
Technical Outlook: Upside Momentum Slowly Rebuilding
EUR/USD’s chart is showing a subtle but meaningful shift:
- Price has moved above both the 15-day (1.1574) and 20-day (1.1561) moving averages, signalling short-term bullish rotation.
- The moving averages are flattening, suggesting that downside momentum has stalled and the pair may be forming a higher-low base.
- The RSI (14) at 51.07 has crossed back above the neutral 50 line — often a preliminary signal of trend reversal or momentum strengthening.
The pair remains range-bound, but the technical bias is shifting slightly in favour of EUR bulls for the first time in several weeks.
Macro Drivers: Euro Supported by Improved Risk Sentiment
Several factors are contributing to EUR/USD’s stabilization:
Euro-Supportive Dynamics
- Risk appetite has improved across global markets.
- Eurozone economic signals, while mixed, have avoided further deterioration.
- The ECB’s tone has turned mildly constructive, reducing downside pressure.
Dollar Weakness
- The US dollar has softened as yields have steadied.
- Traders believe the Federal Reserve may be done with major tightening.
- US macro data has cooled slightly, reducing urgency for USD buying.
This macro backdrop creates space for a euro rebound, though upside traction remains cautious.
Key Technical Levels to Watch
|
Level |
Importance |
|
1.1620–1.1640 |
First major resistance zone |
|
1.1700 |
Breakout level for bullish continuation |
|
1.1550 |
Support at moving averages |
|
1.1500 |
Critical downside support |
A push through 1.1620–1.1640 would confirm short-term bullish momentum.
A daily close above 1.1700 would break EUR/USD out of its consolidation and signal trend reversal.
Failure to hold 1.1550 would expose 1.1500, the key floor of the current structure.
Sentiment Check: Traders Are Turning Mildly Bullish
- Retail flows show increased long positioning
- Institutional perspectives have shifted from bearish to neutral
- Options flows favour upside volatility more than last week
Sentiment is still balanced — but leaning cautiously positive for euro bulls.
EUR/USD is showing early signs of a potential bullish shift, supported by improving technicals and a softer dollar backdrop. The pair has not yet broken out, but pressure is building.
- Bullish Scenario: A break above 1.1620 opens a path toward 1.1700.
- Bearish Scenario: Failure to hold 1.1550 puts 1.1500 back in focus.
For now, the euro is stabilizing and slowly regaining momentum.