EUR/USD Update

EUR/USD has faced challenges in building on the weekly gains seen over the last four days, showing a slight decline and trading below the 1.1700 level during Friday’s Asian market. However, this downward trend is somewhat mitigated by a lack of significant buying of the US dollar (USD) and the upcoming US consumer inflation data, which is expected later today.

At the same time, escalating tensions in the Strait of Hormuz are lending some support to oil prices, which stokes inflation worries and raises expectations for a more aggressive stance from the Federal Reserve. This scenario appears to benefit the safe-haven USD, adversely affecting the EUR/USD pair. Still, there is some restraint among USD bulls ahead of the crucial US Consumer Price Index (CPI), which has provided a bit of support for the currency pair.

Looking at the technical side, a recent breakthrough through the 1.1670 mark—a confluence formed by the 200-day simple moving average (SMA) and the 38.2% Fibonacci retracement level from the earlier January-March decline—seems to favor EUR/USD bulls. Additionally, momentum indicators are painting a positive picture, with the Relative Strength Index (RSI) lingering around 58, not yet in overbought territory, while the Moving Average Convergence Divergence (MACD) remains in positive territory.

On the resistance side, the first point appears to be the 50.0% retracement near 1.1742, followed by the 61.8% Fibonacci mark at 1.1820. Further obstacles include a barrier at 1.1931 and a previous swing high around 1.2072. On the downside, immediate support can be found at the 200-day SMA at 1.1672 and the adjacent 38.2% Fibonacci level at 1.1665. A deeper correction could see the price move toward the 23.6% level at 1.1568, with the March monthly swing low lurking just before the significant 1.1400 mark.

EUR/USD Daily Chart

The technical analysis presented here was generated with the assistance of AI tools.