Evening Update for EUR/USD – July 31, 2025
Original Analysis by Economies.com
Overview:
As the last trading session of July approaches its end, the EUR/USD pair remains in a consolidative phase, hovering just below key resistance levels. After experiencing a minor decline earlier in the session, the euro has shown signs of stabilization against the US dollar. The pair is trading within a defined range, with technical indicators suggesting upcoming volatility. Market participants are closely watching for any triggers that could initiate a breakout in either direction.
Price Movement Summary:
– The EUR/USD pair maintained a sideways trend for most of the day, fluctuating between intraday support and resistance areas.
– Immediate resistance has settled around the 1.0985 level, which remains unbroken on the daily chart.
– The immediate support is noted near the 1.0910 region, forming a narrow trading channel.
– The price continues to trade below the 50-day Exponential Moving Average (EMA), indicating sustained bearish pressure.
Technical Indicators:
Relative Strength Index (RSI):
– The RSI is currently positioned near the 50-neutral zone.
– The indicator shows a lack of momentum, revealing market indecision.
– A movement above 60 or below 40 could act as confirmation of directional bias.
MACD (Moving Average Convergence Divergence):
– The MACD histogram continues to hover just below the zero line.
– The signal line and MACD line remain tightly aligned, offering little directional clarity.
– No significant bullish or bearish crossover is visible at this time.
Exponential Moving Averages:
– The 50-day EMA remains overhead at around 1.0985, reinforcing short-term resistance.
– The 100-day EMA is currently situated near 1.0925, offering weak support.
– A decisive daily close above the 50-day EMA is needed to reassert bullish momentum over the short term.
Candlestick Patterns and Chart Formation:
– A series of small-bodied candlesticks have formed on the 4-hour chart, indicating hesitation among traders.
– No strong reversal patterns such as hammers or engulfing formations have emerged.
– The consolidation phase is defined by horizontal movement and narrowing trading ranges.
Market Sentiment and Fundamental Context:
– The euro’s performance today reflects broader uncertainty stemming from divergent monetary expectations between the European Central Bank (ECB) and the United States Federal Reserve.
– Traders are awaiting clearer signals regarding the Fed’s future rate path, particularly amid mixed macroeconomic data from the US.
– The US GDP data released earlier in the week was modestly above expectations, providing a mild boost to the dollar.
– Meanwhile, inflation figures from the Eurozone continue to reflect persistent disinflation, potentially encouraging a dovish stance from the ECB.
Potential Scenarios Based on Technical Setup:
If Resistance Holds at 1.0985:
– Sellers could regain control if the pair fails to breach the 1.0985 barrier.
– Potential downward targets include:
– 1.0930 (minor support zone)
– 1.0910 (key technical support)
– 1.0875 (lower boundary of the broader trading range)
If Support Holds at 1.0910:
– Bullish traders may attempt to push the pair upward on signs of weakening dollar demand.
– Potential upward targets include:
– 1.0960 (near-term barrier)
– 1.0985 (critical resistance)
– A breakout above 1.0985 may open the door to test the psychologically important 1.1025 region.
Positive Signs to Watch For:
– A sustained move above the 50-day EMA.
– RSI stability above 60, confirming bullish momentum.
– Bullish candlestick pattern on either the 4-hour or daily chart.
Negative Signals to Monitor:
– A bearish MACD crossover accompanied by declining RSI.
– Price closing below the lower boundary of 1.0910.
– Failure to break
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