The EUR/USD currency pair capped the week with a strong close, topping 1.1700 on the upside. It rebounded strongly after falling to a low of 1.1583 on Friday. The market is off to a roaring start. The euro is benefiting, in echo of this big move, and against the dollar. As of writing, the duo is dancing around the 1.1730 mark, an encouraging sign that more progress may be in store over the next few weeks.
After slumping through most of last week’s trading, EUR/USD showed some impressive strength, clawing back from its weekly nadir. The pair is now looking to retest its 2025 peak at 1.1830, with first resistance seen at 1.1730. Support for the pair has been spotted by analysts at 1.1650 and 1.1590. These zones provide a compelling buffer to any ineluctable downward trend.
Bullish Momentum in EUR/USD
This EUR/USD pair is having a good time above solid bullish 20 Simple Moving Average (SMA). Currently, that SMA is about 1.1510. This technical indicator points toward the continued positive momentum, as the pair has strong bullish tendencies. The EUR/USD daily chart further corroborates this perspective, demonstrating clear and uninterrupted bullish trajectory.
The pair’s 100 and 200 SMAs reflect a slight bullish bias. They’re still way short of the shorter-term average. This divergence leaves the door open for short-term volatility. The euro’s medium- and long-term prospects against the dollar are bullish.
The modest increase in business activity was the sharpest since May 2024. Output has now risen in each of the past eight months – Hamburg Commercial Bank (HCOB) report.
Judging by the recent economic data, business activity in Europe appears to be experiencing a strong rebound. This increase only makes the euro’s position even better. Analysts warn that further improving economic conditions would likely push EUR/USD above the key resistance level.
Resistance and Support Levels
EUR/USD approaches 1.1730 key resistance for the second consecutive week. Market participants, including borrowers, lenders, and investors, are observing this critical threshold with great interest. If price manages to break above this resistance level, it might unlock this year’s range top at 1.1830. Additional gains could see it head up to challenge the 1.1900 level.
If the pair comes under selling pressure, traders will look for support near 1.1650. They will be watching the 1.1590 area for further support. These support levels have become essential anchors in keeping bullish sentiment alive in the market.
The bullish technical outlook continues as long as EUR/USD stays above these support lines. The weekly chart paints a pretty bullish picture. This means traders will probably continue to be bullish about earning more with the euro.
Economic Influences and Market Sentiment
Three economic dynamics underlie the current market environment. In part, tariffs and US/EU trade relations have contributed to this influence. In a joint statement, officials indicated that they would “apply the higher of either the US Most Favored Nation (MFN) tariff rate or a tariff rate of 15 percent, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union.”
Such moves would be hugely impactful on currency values as trade patterns shift. Market sentiment suggests that these kinds of things are becoming the base case as traders more aggressively recalibrate positioning in front of eventual reactivity.