The EUR/USD currency pair shows a slight bearish disposition as it trades a tad above the all-important 1.1500 level of support. The pair receives minor bearish pressure, however it still continues to remain above this important psychological mark. The level may act as a longer term support area in the coming weeks and months. As of Friday’s close, EUR/USD had fallen back below 1.16, settling near 1.1530 after a roller coaster week. This decline is entirely driven by a drop in demand for the US Dollar (USD).
From a technical perspective, the indicators point toward a very tough environment for EUR/USD. The exchange rate is now trading just under the mildly bearish 20 Simple Moving Average (SMA). This SMA is currently at 1.1630 and serves as a dynamic resistance level. This resistance level is closely watched by traders. If they are unable to retake this level, fear of a bear market may spread deeper into the crypto space.
At this point, EUR/USD is currently trading under the 100 and 200 SMAs as well, showing overall weakness in the bullish pattern. The 100 SMA, in particular, is pattern-wise the most aggressive to be below the current price and is demonstrating a notable loss in bullish momentum. This is a troubling trend for speculators who expect bullish price action in the short-term.
The daily EUR/USD chart, with prices closing lower for the second consecutive day. This trend further increases the bearish sentiment on behalf of traders. Technical readings indicate that more downside extension might be coming. The 20 SMA is currently located at roughly 1.1505, establishing a new potential buy zone. If EUR/USD were to approach this level, it might attract buyers looking to position themselves ahead of a bounce.
Resistance levels for EUR/USD are 1.1613, 1.1630, and 1.1663. Support levels are 1.1505, 1.1470, and 1.1420. On the flip-side, watch resistance levels at 1.1560, 1.1600 and 1.1630. The extremely narrow trading range shows just how uncertain everyone is right now.
The USD is sensitive to economic conditions in the United States, which can affect the USD’s overall strength. In turn, that affects trading patterns of EUR/USD. Add to this the conclusion from HCOB, which recently recognized that
“Mounting evidence that the US job market is softening, and no signs of tariff-driven inflation translate into a soon-to-come interest rate cut.”
The overall mood with both currencies seem to be driven by economic realities.
“the rate of increase in business activity remained sluggish and was weaker than the survey average as stagnant demand held back output,”
the overall sentiment surrounding both currencies appears to be influenced by underlying economic fundamentals.