Title: EUR/USD Bulls Press Higher: Can Resistance Give Way This Time?
Original Author: James Harte
Source: Action Forex – Technical Analysis Article
The EUR/USD pair has seen a notable push from the bulls in recent trading sessions, marking a resurgence in buying interest despite ongoing macroeconomic uncertainties. As traders assess the future direction of the pair, much attention is being paid to the critical resistance zone currently capping gains. This article provides a comprehensive breakdown of recent price action, potential key levels to watch, and indicators that could shape the EUR/USD outlook in the near term.
Overview of Recent EUR/USD Price Action
The euro has strengthened against the US dollar in recent weeks, rebounding from previous lows and bringing into focus a key resistance zone just above the 1.0900 mark. This area has repeatedly limited gains over the past month, acting as a pivotal ceiling for bullish momentum.
– After testing support around 1.0650 in mid-May, the pair launched a recovery that has been relatively consistent.
– Price action has shown a clear sequence of higher lows since the bounce, indicating growing buyer confidence.
– Despite repeated attempts, EUR/USD bulls have failed to maintain a sustained break above the 1.0900–1.0920 region thus far.
– The US dollar’s underperformance has contributed to upward pressure on the pair, with softer-than-expected economic data adding to the trend.
Technical Analysis of EUR/USD
As bulls attempt to push higher, the technical picture becomes increasingly informative. Let’s examine the primary technical drivers currently at play.
Resistance Zone: 1.0900–1.0920
– This resistance level has rejected several bullish advances since April.
– Daily candles show multiple upper wicks near this area, signaling active selling pressure whenever price attempts to breach it.
– A confirmed daily close above this resistance would signal an important breakout, with implications for a deeper bullish surge.
Support Zone: 1.0800–1.0780
– On the downside, support has formed around the 1.0800 psychological level.
– The 50-day moving average is converging in this area, adding technical weight as a support buffer.
– A break below this zone would signal weakening momentum and could open the path for a move back toward the 1.0700 region.
Moving Averages
– The 50-day simple moving average (SMA) has flattened slightly but continues to offer dynamic support below the current price.
– The 100-day SMA remains positioned lower and upward sloping, further providing medium-term bullish context.
– An encouraging sign for bulls is that the 50-day SMA is converging with short-term support, indicating a possible base from which price could lift again.
RSI and Momentum Indicators
– The Relative Strength Index (RSI) on the daily time frame has been hovering near the 60 level, suggesting moderately bullish momentum but no overbought conditions.
– Momentum indicators are beginning to curve upward once again, reinforcing the potential for another advance if resistance breaks.
Trendline Structure
– A clearly defined ascending trendline from the May lows supports the bullish bias and suggests consistent upward pressure in recent weeks.
– The trendline offers a guide for short-term buyers and helps frame expectations beneath key horizontal levels.
Macro Context Supporting the Euro
Several macroeconomic narratives are helping the euro’s recovery, particularly in contrast to the US dollar’s recent softness. These include:
– Easing fears over the European Central Bank’s (ECB) rate path, with markets expecting a more stable policy stance through the summer.
– Improved Eurozone manufacturing and services data have lent fundamental support to the euro.
– The US dollar has faced pressure amid lower-than-expected inflation data and rising anticipation of eventual Federal Reserve rate cuts.
– Global risk sentiment has also provided indirect support, as investors drift away from the safe-haven dollar toward risk-on currencies, including the euro.
What to Watch in Upcoming Sessions
Bulls appear intent on testing
Read more on EUR/USD trading.