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EUR/USD Analysis: Amid US-European Tensions

By Mahmoud Abdallah

Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of tra...

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EUR/USD Analysis Summary Today

  • Overall Trend: Upward.
  • Today's Euro-Dollar Support Levels: 1.1355 – 1.1280 – 1.1200.
  • Today's Euro-Dollar Resistance Levels: 1.1445 – 1.1520 – 1.1600.

EUR/USD Trading Signals:

  • Buy Euro-Dollar from the 1.1240 support level with a target of 1.1420 and a stop-loss of 1.1160.
  • Sell Euro-Dollar from the 1.1480 resistance level with a target of 1.1200 and a stop-loss of 1.1600.

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EUR/USD Technical Analysis Today:

Recently, the EUR/USD pair has seen a significant rise from its recent lows, trading above a clearly defined uptrend line and moving towards critical Fibonacci resistance levels. The Euro-Dollar is currently trading at 1.1395 after encountering headwinds near the 50% retracement level at 1.1341, indicating that bears are defending this key technical area.

The EUR/USD pair has successfully surpassed several moving averages, with dynamic support levels forming the basis of its recent advance. This bullish moving average formation confirms that the stronger path has shifted to the upside, at least in the near term. From a Fibonacci perspective, the EUR/USD is approaching a crucial turning point. The 38.2% retracement level at 1.1361 could provide short-term support, while the 50% level at 1.1341 appears consistent with a previous resistance zone. A larger correction could reach the 61.8% Fibonacci level at 1.1420, which coincides with the rising trendline support and could act as a turning point in an uptrend. In other words, a break below this level could be an early signal of a trend reversal.

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Trading Tips:

Dear TradersUp follower, the Euro-Dollar pair will remain near its gains pending reactions to key US economic releases and the future of the US-European trade dispute.

Meanwhile, the ascending trendline support, originating from swing lows, continues to provide a bullish backdrop for the pair. As long as the price stays above this rising support, the medium-term outlook favors further upward momentum. Technical indicators paint a mixed picture. The Stochastic indicator is hovering in the overbought zone, suggesting that the upward momentum might lose steam in the short term. This could lead to a period of consolidation or a slight pullback to absorb recent gains. Meanwhile, the Relative Strength Index (RSI) is approaching overbought levels but has not yet reached extreme readings, indicating that buyers may still have some strength to continue the ascent.

Overall, EUR/USD traders should closely monitor the 50% Fibonacci level, as any decisive break above 1.1350 could trigger momentum-driven buying towards the next resistance cluster around 1.1420-1.1425.

On the economic data front today, we'll first monitor the announcement of the German GFK Consumer Climate index at 9:00 AM EEST. Then, more importantly, US durable goods orders will be released at 3:30 PM EEST. ce will also be announced on the same day at 5:00 PM EEST.

Factors Influencing Recent Euro-Dollar Performance:

According to trading on licensed brokerage platforms, the Euro price slightly rose towards $1.14, its strongest level in about a month, after US President Trump announced a delay in imposing the planned 50% tariffs on EU imports. Last Friday, Trump had stated that trade talks with the EU were "making no progress" and suggested imposing heavy tariffs starting June 1.

However, following a phone call with European Commission President von der Leyen, Trump announced an extension of trade negotiations until July 9. Under the reciprocal tariff framework unveiled in April, the EU faces a 20% tariff, which was temporarily reduced to 10% until the new deadline. At the same time, the Eurozone's economic outlook remains fragile. The European Commission lowered its 2024 economic growth forecast to 0.9%. May's PMI data showed private sector activity unexpectedly slipped into contraction in both the Eurozone and Germany, driven by a sharp slowdown in the services sector amid weak domestic demand.

On the monetary policy front, the European Central Bank is widely expected to cut interest rates at its June meeting.

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Mahmoud has been working fulltime in the Foreign Exchange markets for 12 years. Offers his analysis, articles and recommendations at the most renewed Arabic websites specialized in the global financial markets, and his experience gained a lot of interest among Arab traders. Works on providing technical analysis, market news, free signals and more with follow up for at least 12 hours a day, and aims to simplify forex trading and the concept of trading for his audience.

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