The EUR/USD currency pair started this week’s trading on a strong positive upsurge. This increase followed President Donald Trump’s statement that he would postpone the introduction of 50% tariffs on European Union products until 9th July. This widely expected decision has given rise to a new wave of investor optimism. It provides more room for maneuver in the ongoing discussions between President Trump and European Commission President, Ursula von der Leyen.
The extended tariff reprieve gave the EUR/USD notable boost, and technicals suggest the pair has additional upside potential. Some analysts say the pair needs to stay above the 1.1415 level. This will set off the next bullish wave. For now, ASP market sentiment is positive in the short term, with key resistance levels close at 1.1420.
If EUR/USD manages to close convincingly above the 1.1420 level, that might open the door for a re-test of April’s cap. That barrier is located at about the 1.1512 mark. Traders are watching these levels intently, as a break above may signal the start of a new bullish trend. On the downside, the 50-day simple moving average (SMA) continues to act as an important pivot area just above 1.1160. If the currency pair desolates below this level, it would trigger a sharper drop. Such a move would likely take it through the psychological level of 1.1000.
On the technical side, the stochastic oscillator is just above its overbought level of 70. Immediate benefits are possible as well. This is where you want to exercise some caution as a bearish reversal may occur around the 1.1420 resistance area. In the event of a reversal, we can expect support at these two important areas. The first is the 20-day SMA at 1.1270, the second just below/around the 1.1230 region.
If EUR/USD can break this support level convincingly, it would likely set off a rally of its own. This rally will likely target the trendline area from 1.1670 to 1.1720. Traders are acutely focused on the 161.8% Fibonacci extension of the prior downtrend at 1.1885. This new level represents an important breakthrough area where an upward move could have room to run.