**EUR/USD Price Forecast: Euro Steadies at 1.1736 with Bulls Eyeing 1.1916**
*Adapted from TradingNews.com, originally by James Stanley*
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The Euro-Dollar (EUR/USD) pair witnessed a stabilizing phase near the 1.1736 level after a period of volatility, showing signs of basing out as traders set their sights on higher resistance zones. The recent technical developments suggest a potential for further upside, especially as market participants weigh shifting fundamental factors and key upcoming events. This extensive forecast breaks down the current price action, technical structure, and critical levels that may dictate the next moves in the EUR/USD pair.
## Fundamental Backdrop
Recent sessions have presented a complex backdrop for the Euro, with fundamental factors both at home and abroad influencing direction:
– **Inflation and Central Bank Policy**
– Eurozone inflation remains elevated, sparking ongoing debates around the European Central Bank’s (ECB) next moves.
– The Federal Reserve’s tightening path in the United States appears priced in to some degree, creating space for Euro retracements amid any signs of dovish intent from the Federal Reserve or hawkish sentiment within the ECB.
– **Geopolitical and Economic Risks**
– Ongoing uncertainties, including the energy crisis in Europe and global supply chain disruptions, continue to exert downward pressure on the single currency.
– Relief rallies typically emerge around signs of normalization and improved risk sentiment, fueling the bulls’ case for upside correction.
– **Recent Data Highlights**
– Euro-area economic prints have shown resilience, with PMIs rebounding faster than anticipated in key sectors.
– US macro releases, especially job data and inflation signals, continue to set the tone for Dollar dominance or retracement.
## Technical Analysis: Key Levels on the Radar
Technical readings place the EUR/USD at a potential pivot, where the recent stabilization at 1.1736 could form a springboard for bullish momentum. Judging by price action and broader chart patterns, the following areas warrant close attention:
### Immediate Support and Resistance
– **Support: 1.1700/1.1736 Zone**
– This zone is critical as it marks recent lows aligning closely with prior key lows from early 2024.
– A break below would likely open up a test of the next major support near 1.1600.
– **Resistance: 1.1800/1.1850**
– The 1.1800 handle is both a psychological barrier and a minor technical resistance, as recent attempts to break through have been met with selling pressure.
– 1.1850 marks a confluence of former support-turned-resistance and moving averages on the daily chart.
### Medium-term Target: 1.1916
– 1.1916 represents a key swing high from a prior rally phase and stands as a significant hurdle for Euro bulls.
– A sustained breakout above 1.1850 could see momentum accelerate towards this level, inviting possible trend extensions if accompanied by strong volume.
## Chart Patterns and Trading Setups
Analyzing the daily and four-hour timeframes, several patterns and signals emerge:
– **Basing Formation**
– The consolidation and repeated tests of 1.1736 suggest the formation of a potential bottoming base.
– If confirmed by further upside closes, this pattern could underpin an extended rebound.
– **Descending Trendline Break**
– A descending trendline drawn from March 2024 highs has recently come under threat, with prices challenging its integrity.
– A confirmed close above this trendline would bolster bullish sentiment and validate the case for further gains.
– **RSI and Momentum Oscillators**
– The Relative Strength Index on the daily chart has exited the oversold territory, pointing to a possible trend reversal.
– MACD readings show early signs of bullish crossover, supporting the upside bias.
## Key Drivers for the Next Moves
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