EUR/USD Technical Analysis – October 20, 2025
Original Analysis by: Ibeth Rivero | Source: DailyForex.com
The EUR/USD currency pair showed signs of bullish momentum in the latest trading sessions, rebounding from previous lows and attempting to recover lost ground as investors assessed a combination of factors influencing the Euro and U.S. dollar. These include mixed economic indicators from both the Eurozone and the United States, diverging monetary policy expectations, and geopolitical tensions that continue to create volatility in global financial markets.
As of October 20, 2025, the EUR/USD is trading near the 1.0590 level, reflecting a modest uptick during Friday’s session. Traders and analysts are closely watching whether this upward movement has the strength to continue or if it marks a temporary retracement within a broader bearish trend.
Key Technical Outlook
– The pair faced significant resistance near the 1.0600 psychological handle, testing this barrier multiple times during the past week.
– On the downside, strong technical support is observed around the 1.0450 level, which has acted as a floor in recent sessions.
– The market sentiment appears cautiously bullish in the short term, although macroeconomic headwinds and policy divergence may limit sustained upside potential.
Let’s delve deeper into the various technical and macroeconomic factors that are shaping price action and investor sentiment surrounding EUR/USD.
Short-Term Price Action
– During the past few trading days, EUR/USD has attempted to break through a well-defined descending channel that has guided price movement for several weeks.
– Price activity remains somewhat range-bound between the 1.0450 support and 1.0600 resistance, leading to uncertainty as traders await a decisive breakout to gauge the next directional move.
– Friday’s closing price near 1.0590 raised cautious optimism among bulls. Still, the daily chart shows that the rally lacks strong volume and momentum-based confirmation, indicating that buyers may be hesitant to take a more aggressive stance.
– If the pair manages to break above the 1.0600 zone with conviction, the next potential resistance area comes in near the 1.0650 region, followed by a more significant hurdle around 1.0700.
Moving Averages and Indicators
– The 50-period Simple Moving Average (SMA) on the 4-hour chart is beginning to flatten, signaling potential stabilization in the downtrend. However, the pair remains below the 100-period SMA, which suggests the broader bearish environment is still intact.
– The Relative Strength Index (RSI) on the daily chart is hovering slightly above the 50-neutral level, implying mild bullish momentum but not yet in overbought territory. This leaves room for continued upward movement if fundamentals support price gains.
– The Moving Average Convergence Divergence (MACD) indicator has turned slightly positive on the 4-hour chart, with the MACD line crossing above the signal line. While this crossover often suggests initial bullish sentiment, confirmation from other indicators and volume is necessary to validate the move.
Support and Resistance Levels
The following price areas are crucial for short-term technical traders:
Support:
– 1.0520: First-level intraday support, previously tested earlier in the week.
– 1.0480–1.0450: A key support area that has held firm over recent sessions. A break below this zone could open the door to deeper declines toward 1.0380 and eventually 1.0250.
Resistance:
– 1.0600: Immediate resistance and a psychological round number. A break above would grab attention from buyers.
– 1.0650: A higher cap that aligns with the 100-day SMA and a past consolidation area.
– 1.0700: A significant resistance zone that could trigger profit-taking or a potential reversal.
Fundamental Backdrop
U.S. Dollar Fundamentals:
– U.S. economic indicators released throughout last week sent mixed signals. Retail sales data showed resilience in
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