EUR/USD Regains Momentum Above 1.16 — Is a Trend Reversal Finally Underway?

The euro is showing early signs of revival as EUR/USD climbs back toward 1.1640, lifting off recent lows and holding above key moving averages. With momentum improving and the RSI turning upward, traders are now asking whether the world’s most traded currency pair is preparing for a broader bullish reversal — or simply staging another short-term bounce.

Bulls Are Slowly Re-Emerging

After dipping toward the 1.14 zone in late October, the pair has begun to firm up, with price action now stabilizing above both short-term moving averages.

Here’s what the chart shows:

• The 15-day and 20-day moving averages are beginning to flatten and curl upward, signalling the early stages of potential trend reversal.
• The pair is trading above both moving averages, a constructive sign that the short-term bulls are regaining control.
• The RSI (14) sits around 55.2, showing building momentum without nearing overbought territory.

This combination — price reclaiming moving average support + rising RSI — often marks the transition from consolidation to early uptrend, especially when accompanied by improving sentiment.

Macro Drivers: US Dollar Softens as Eurozone Stabilizes

The rebound in the pair arrives at a time when the US dollar is losing some of its recent strength amid:

• Softer U.S. economic data
• Increased speculation that the Federal Reserve may pause tightening sooner than expected
• Declining Treasury yields

Meanwhile, the Eurozone, though far from booming, is showing tentative signs of stabilization. Markets are pricing in:

• Slowing inflation
• Reduced recession risk
• A more balanced ECB outlook

With euro fundamentals less fragile than a few months ago, the pair is finding support at precisely the right time.

Key Technical Levels to Watch

A break above 1.1700 would confirm the bullish reversal and open the door toward 1.1800 or even 1.19.

A drop back below 1.1580, however, would signal the move is losing steam — pushing the pair back into consolidation or even retesting the lows near 1.15.

Traders Turning Cautiously Bullish

EUR/USD positioning shows:

• Short-term traders beginning to favour longs
• Momentum traders eyeing potential breakout levels
• Institutional flows are mixed but slowly shifting toward euro stabilization

Confidence isn’t euphoric — but it’s improving, and that’s exactly how sustainable trends often begin.

Takeaway

The pair is at the early stages of what could become a meaningful bullish reversal.

Technicals lean supportive, fundamentals are shifting, and momentum indicators suggest room for a continued climb.

If 1.1700 breaks, the euro’s comeback may accelerate sharply.

But a failure to hold 1.1580 would put the recovery at risk.

The next few sessions could dictate the pair’s direction into the year-end.