EUR/USD Analysis Summary Today
- Overall Trend: : Remains bearish.
- Support Levels for EUR/USD Today: 1.1610 – 1.1540 – 1.1470.
- Resistance Levels for EUR/USD Today: 1.1685 – 1.1750 – 1.1830.
EUR/USD Trading Signals:
- Buy the EURUSD from the support level of 1.1560, target 1.1800, and stop at 1.1480.
- Sell the EURUSD from the resistance level of 1.1740, target 1.1600, and stop at 1.1800.
Technical Analysis of EUR/USD Today:
As expected, the EUR/USD price has remained within narrow ranges at the start of this week's trading, pending the market and investor reaction to the policy announcements from both the US Federal Reserve (Fed) and the European Central Bank (ECB). Across reliable trading company platforms, the EUR/USD price is stable around the 1.1650 level at the time of writing this analysis.
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EUR/USD Technical Forecast
As observed, the Euro is resisting the US Dollar's strength better than most currencies, which is expected to allow it to trade strongly this week. The Euro gained slight, cumulative increases against the US Dollar last week, and is seeing a new rise at the start of this important week, moving past the nine-day Exponential Moving Average (EMA) at 1.1630.
This rise suggests that short-term momentum may have shifted to the upside, and there is potential for steady movement through the mid-to-late 1.16 area. Although the Euro is rising slowly, it is not decisively trending upward, and it is worth noting that the EUR/USD pair is still trading within a multi-month consolidation range. The lower bound of this range extends to 1.1550 (discounting the quick-corrected July drop to 1.14), while the upper bound of the range is at 1.1750, with temporary spikes to 1.18 and above being short-lived.
Therefore, we are likely to see a rally within this mentioned range, which means that both strength and weakness will be limited.
With the Euro remaining steady against the US Dollar, much depends, of course, on what the US Federal Reserve will do mid-week. We know they will cut US interest rates by 25 basis points, but we don't know their view on any further rate cuts later in the year. The general rule for trading is that any encouragement for further cuts will negatively affect the Dollar and allow the EUR/USD pair to break the 1.17 resistance. Generally, recent US survey data confirms that the employment situation is slowly deteriorating, and the Federal Reserve will not want to risk exacerbating this situation by keeping US interest rates restrictive for too long. This would ensure that the potential for further cuts remains on the table.
Trading Tips:
As we advise, the Euro/Dollar will remain in a narrow range pending the market's reaction to the US Federal Reserve announcement this week, followed by the outcome of resolving the US/China trade dispute.
The Future of Central Bank Policies
However, if the US central bank expresses caution about another cut in 2025, this will have a negative impact on the EUR/USD pair. Ultimately, the Fed is short on official economic data due to the government shutdown and will not want to signal any major policy change if it feels it is steering without a clear map. Given this, we believe we will receive very limited guidance from the Federal Reserve, as it does its best to maintain steady governance until official data begins to flow again.
This means that any subsequent reactions to exchange rates following the Fed's decision will eventually fade, and we will end the week relatively stable, with the EUR/USD pair moving upward within a multi-week range.
On another front affecting currency exchange rates, we await the European Central Bank's decision next Thursday, as no change in interest rates is expected. Therefore, a Fed rate cut and the ECB's continued hold on interest rates would allow interest rates in the United States and the eurozone to converge further, which is currently supporting the euro's trading.
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