EUR/USD Forex Signal: 20 August 2025
Original Author: Christopher Lewis (DailyForex.com)
The EUR/USD pair experienced a period of consolidation near the 1.0900 level during the early hours of Tuesday, 20 August 2025. After recent bullish momentum propelled the currency pair to test key resistance zones, traders are now looking for signs of either continued upside movement or a reversal, as the battle between bulls and bears intensifies.
This technical analysis, based on the original article by Christopher Lewis on DailyForex.com, will offer a broader and more detailed perspective on where the EUR/USD currency pair stands and what traders can expect moving forward. It will elaborate on market conditions, support and resistance levels, economic influences, entry/exit signals, and broader strategies for trading the EUR/USD.
Market Overview
The EUR/USD currency pair has recently shown notable strength, recovering from previous lows and testing the crucial 1.0900 region. This area now serves as a psychological and technical inflection point. Given recent data and price behavior, the markets are now in a cautious stance, waiting to see whether this momentum continues or begins to fade.
Key Takeaways:
– The pair has consolidated near the 1.0900 level, a critical resistance-turned-support zone.
– Traders are hesitant to aggressively buy at current levels without a confirmed breakout above resistance.
– The European Central Bank (ECB) and U.S. Federal Reserve’s monetary policies continue to play a pivotal role.
– U.S. economic data scheduled for this week may determine if the U.S. dollar regains strength.
Technical Analysis: EUR/USD Daily Chart
Price Action:
At the time of writing, the EUR/USD is trading just above 1.0900, with short-term momentum indicating a cautious bullish bias. Earlier bullish impulses drove the pair higher, but follow-through buying has been limited. The pair now seems to be gearing up for a significant move, contingent upon the breakout confirmation.
Important Support and Resistance Levels:
Support Zones:
– 1.0840: Near-term support where buyers previously stepped in.
– 1.0800: Psychological and technical support zone, a round number that has previously held price action.
– 1.0740: Bears have targeted this area during prior selloffs, making it vital should downward pressure return.
Resistance Zones:
– 1.0930-1.0950: Strong resistance band where sellers have shown willingness to defend aggressively.
– 1.1000: Symbolic psychological resistance; a breakout above this could indicate renewed bullish momentum.
– 1.1070: A longer-term resistance level that could be tested if 1.1000 breaks with conviction.
Technical Indicators:
– Relative Strength Index (RSI): Currently hovering around the neutral 50 level, suggesting a balanced market with no strong directional bias yet.
– Moving Averages: The 50-day and 200-day simple moving averages (SMAs) are both acting as dynamic support and resistance, complicating the pair’s outlook.
– MACD (Moving Average Convergence Divergence): Has flattened out after hinting at bullish crossover signals last week, indicating a lack of directional clarity.
Short-Term Trade Idea
Christopher Lewis expressed hesitation in chasing the pair upward unless it clearly breaks through major resistance levels. He favors a more measured approach, allowing the market to show its hand before committing to a directional trade.
Bullish Trade Criteria:
– Enter a long position if the pair breaks and holds above 1.0950 on strong volume.
– Target levels: 1.1000 and 1.1070.
– Stop-loss: Place just below 1.0900 to mitigate downside risk if the breakout fails.
Bearish Trade Criteria:
– Consider short positions if the pair fails to break above 1.0930 and begins to lose momentum, closing below 1.0880.
– Target levels: 1.0840 and 1.0800.
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