EUR/USD Technical Analysis – 21 July 2025
Original article by: Christopher Lewis, DailyForex.com
The EUR/USD currency pair continues to register notable volatility as we approach late July 2025. Amid changing macroeconomic conditions and expectations for monetary policy shifts by both the European Central Bank (ECB) and the U.S. Federal Reserve, the currency pair has been subjected to market uncertainty marked by inconsistent momentum and resistance at key technical levels. A closer look at the price action, indicators, and previous trends offers insight into potential future moves.
Overview of Market Conditions
The recent trading sessions have showcased a market torn between opposing forces. On one end, the euro gains support from improved eurozone economic conditions, including firming inflation and positive trade balance figures. On the other, the U.S. dollar continues to attract demand due to the Federal Reserve’s hawkish stance on interest rates and continued economic resilience in the United States.
However, despite these macroeconomic drivers, the EUR/USD has struggled to maintain any directional bias, suggesting a market controlled more by technical boundaries than by fundamental catalysts.
Technical Analysis
The EUR/USD has repeatedly encountered selling pressure near the 1.0950 level and obstinate support at 1.0800. This suggests a consolidation phase or what is often called a “range-bound” structure. Traders are closely watching these technical bounds as possible breakout or breakdown levels which could define market direction for the coming sessions.
Key Levels to Watch
Traders and analysts widely monitor certain critical price levels closely:
– Resistance Zone:
– 1.0950: A region that has proven difficult to break above, as sellers consistently emerge in this zone.
– 1.1000 round figure: The psychological level is always a focal point for new entries and exit orders. Breaking above this zone may indicate a potential upside continuation.
– Support Zone:
– 1.0850: Emerging as intermediate support in recent trading activity.
– 1.0800: A key psychological and technical threshold. A sustained break below this level may trigger bearish momentum.
Price Action Overview
– The pair tested the 1.0950 level several times in the past week but was met with downward pressure each time.
– Price action shows an inability to sustain rallies, indicating possible fading bullish sentiment.
– Bearish candles dominating after testing upside levels show selling strength quietly building.
Given the structure of the last several sessions, the EUR/USD looks to be defining a consolidation range with key pressure points visible at the 1.0950 resistance and 1.0800 support.
Exponential Moving Averages (EMAs)
Christopher Lewis notes the influence of moving averages in his analysis. These technical indicators smoothen price action and are used to identify potential trend continuation or reversal.
– The 50-Day EMA:
– Functioning as dynamic support when price trades above it.
– Currently, the EUR/USD fluctuates near this level, making it pivotal to future directional moves.
– The 200-Day EMA:
– This longer-term trend indicator is trading below the current market price.
– As long as price remains above the 200-day EMA, the broader trend bias leans slightly bullish, despite short-term corrections.
Momentum Indicators
Momentum oscillators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) can provide further context into potential future price action dynamics.
– RSI:
– Hovering in a neutral zone between 45 and 55.
– Not indicating clear bullish or bearish momentum, reinforcing the idea that the market is in a wait-and-see mode.
– MACD:
– The lines are relatively flat and close to the zero axis.
– Lack of divergence suggests limited momentum strength in either direction.
This neutrality in momentum supports the current range-bound structure and discourages large entries unless a breakout occurs.
Fundamental Backdrop
Macro fundamentals continue to influence overall market sentiment behind the currency pair.
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