EUR/USD had pushed six consecutive days of losses after recoiling from Fiboancci resistance late last month. The 1.0943 level held two different resistance tests, with prices pulling back after the FOMC meeting saw Jerome Powell take a wait-and-see approach with regards to both inflation and possible rate cuts.
Normally, a backdrop like that would allow for a build of USD-strength, and we saw that show up as EUR/USD dropped down for a test of the 200-day moving average, but that's around when the weakness started to slow. Buyers responded in a big way and that led to a breakout and fresh three-year highs just a week later.
Notably, before those highs could print it was the same 1.0943 Fibonacci level that held support, and that has some relation to another key level that's so far held support for this week at 1.1275, which is the 61.8% retracement of the 2021-2022 major move.
At this point bulls have retained control of the pair and this week presented another couple of fundamental drivers that would seem to point at reversal, with a strong U.S. retail sales report, a Jerome Powell that sounded somewhat hawkish with inflation expectations around tariffs; and then the dovish ECB rate cut on Thursday. Despite all that - EUR/USD has held up fairly well and it's that deduction that illustrates bullish potential into next week.
For resistance - 1.1500 is huge. This was last in-play in early-2022 and it was resistance on multiple occasions before bears were able to take care of matters. So, chasing breakouts at the big figure could be challenging. Pullbacks could remain attractive and given the response to 1.1275, we can see where buyers had responded quickly to that. Of interest is the 1.1200 level that was hardened resistance in Q3 of last year, and then possibly even the 1.1100 level that held the highs earlier in April. For invalidation of trend, it's the 1.0900-1.0943 zone that I think remains of interest. - js
Normally, a backdrop like that would allow for a build of USD-strength, and we saw that show up as EUR/USD dropped down for a test of the 200-day moving average, but that's around when the weakness started to slow. Buyers responded in a big way and that led to a breakout and fresh three-year highs just a week later.
Notably, before those highs could print it was the same 1.0943 Fibonacci level that held support, and that has some relation to another key level that's so far held support for this week at 1.1275, which is the 61.8% retracement of the 2021-2022 major move.
At this point bulls have retained control of the pair and this week presented another couple of fundamental drivers that would seem to point at reversal, with a strong U.S. retail sales report, a Jerome Powell that sounded somewhat hawkish with inflation expectations around tariffs; and then the dovish ECB rate cut on Thursday. Despite all that - EUR/USD has held up fairly well and it's that deduction that illustrates bullish potential into next week.
For resistance - 1.1500 is huge. This was last in-play in early-2022 and it was resistance on multiple occasions before bears were able to take care of matters. So, chasing breakouts at the big figure could be challenging. Pullbacks could remain attractive and given the response to 1.1275, we can see where buyers had responded quickly to that. Of interest is the 1.1200 level that was hardened resistance in Q3 of last year, and then possibly even the 1.1100 level that held the highs earlier in April. For invalidation of trend, it's the 1.0900-1.0943 zone that I think remains of interest. - js
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.