EUR/USD Analysis Summary Today
- Attempting to break the bearish trend.
- Support Levels for EUR/USD Today: 1.1640 – 1.1570 – 1.1490.
- Resistance Levels for EUR/USD Today: 1.1740 – 1.1800 – 1.1880
EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1580 with a target of 1.1800 and a stop-loss of 1.1490.
- Sell EUR/USD from the resistance level of 1.1800 with a target of 1.1600 and a stop-loss of 1.1880.
Technical Analysis of EUR/USD Today:
Based on recent Forex market trading. Euro trading has turned the tide against the US dollar, and further gains are likely as a result. The US dollar has come under renewed pressure against the euro following a sharp sell-off in US regional bank stocks. Zions Bank shares fell 13% after a $50 million write-off linked to a loan to California Bank & Trust, while Western Alliance Bank shares fell 11% after revealing its exposure to the same borrowers. Overall, these developments point to the potential emergence of vulnerabilities in US credit markets.
As currency investors know, when market concerns focus on US-specific issues, the US dollar tends to come under pressure: EUR/USD jumped to 1.1720 following these headlines before quickly rebounding and closing last week’s trading session around 1.1650, awaiting strong catalysts for a rapid rebound.
However, as the stock market sell-off extended to major European bank stocks last Friday, this US-centric feature faded somewhat, allowing the US Dollar to recover some of those losses, bringing the EUR/USD pair back to 1.1690. Nevertheless, the US Dollar fell by $0.65\%$ against the Euro over the week, and the EUR/USD pair is heading for a rally again amidst a shift in momentum, with some analysts predicting a potential test of the 1.18 resistance level soon.
Factors supporting the euro’s rise
Recently, according to currency experts, French Prime Minister Lecornu’s resilience in two no-confidence votes last Thursday contributed to the euro’s trading. He survived after announcing plans to suspend pension reforms until after the next presidential election in 2027, sacrificing fiscal discipline for political necessity. According to experts, the French government’s stability, albeit volatile, is enough for the euro to offset a significant portion of France’s risk premium. Unless a new French government collapses before the end of the year, this should allow the EUR/USD pair to refocus on fundamental market drivers (interest rates and stocks).
On the other hand, the US dollar has also been under pressure due to the Federal Reserve’s ambition to cut interest rates by another quarter percentage point at its October meeting, seeking to support growth while avoiding rising inflation. As a result, the EUR/USD pair is now heading towards the resistance level it will reach in early October at 1.1750/1.1770. Overall, the Fed’s dovish tone has anchored the EUR/USD pair around the 1.18 resistance level, and this gap is expected to close quickly in light of the above developments.
The Future of US Interest Rates in the Coming Months
In this regard, US Federal Reserve Chairman Jerome Powell indicated in a speech he delivered at the annual meeting of the National Association for Business Economics (NABE) last week: “This policy stance, which I see as still constrained, is… A bit, it puts us in a good position to respond to potential economic developments.” In this context, Powell says the Federal Reserve has ample room to cut interest rates without risking inflation. The rise in stock prices and subsequent decline in the dollar confirm traders’ adoption of this interpretation. In light of these developments, forex market analysts see the 1.18 resistance level as a potential target for the EUR/USD pair in the near term.
Today’s EUR/USD trading is not anticipating any significant European or US economic releases, so forex investor sentiment will be the most important factor driving currency prices today.
Trading Tips:
The bullish shift for the EUR/USD pair needs more stimulus for confirmation, and that may only happen with stability above the 1.1800 resistance, which increases the positive expectations for the psychological resistance of 1.2000. Otherwise, selling pressure will remain the stronger force.
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