Bullish Underpinnings Keep EUR/USD Anchored Above Key EMAs
EUR/USD touches 1.1360 in Monday’s Asian session, holding ground just above its 100-day Exponential Moving Average. The pair stabilizes around the 1.1335–1.1391 range, reflecting a pause in recent advances but preserving a constructive slope on the daily chart. With the 20-day, 100-day and 200-day SMAs all slanting upward, the broader trend remains firmly positive. Shorter-term dynamics reinforce this: the 10-day and 30-day EMAs converge below spot, suggesting that dips toward 1.1315 or even 1.1215 could draw new bids.
Technical Crosscurrents Around 1.1360
Despite the constructive backdrop, momentum oscillators flash caution flags. The Relative Strength Index sits at 61.8—firmly bullish yet shy of overbought territory—while the MACD histogram narrows, hinting at a slowdown in buying pressure. The Momentum indicator on the 10-period chart has slipped into negative territory, underlining the tug-of-war between follow-through buyers and profit-takers. Bull-Bear Power edges flat, illustrating narrow conviction as price consolidates near the psychological 1.1400 threshold.
Momentum Indicators Signal Mixed Near-Term Bias
A breakdown of shorter-term data shows daily Stochastics dipping from overbought, while the 14-week RSI on the weekly chart hovers just above 70.00, highlighting strong medium-term strength but warning of a possible corrective phase. Bollinger Bands on the daily frame have begun to contract after an earlier expansion, signaling reduced volatility even as recent data releases and trade headlines continue to roil markets.
Macro Drivers from Trade Diplomacy to Central Bank Signals
Recent headlines have alternated between optimism and skepticism on US-China tariff talks. President Trump’s comments that “200 trade deals have been made” and that President Xi “has called” him buoyed risk appetite, while Beijing’s denials of any formal negotiations underscored persistent uncertainty. Meanwhile, US Durable Goods Orders jumped 9.2% in March—led by a 27% surge in transportation equipment—while weekly jobless claims rose modestly to 222,000, reinforcing expectations for at least three Fed cuts by year-end. S&P Global’s April Composite PMI slid to 51.2 from 53.5, pointing to cooling services activity even as manufacturing eked out small gains.
US-China Rhetoric Swings Market Sentiment
China’s partial exemption of some US goods from its 125% tariffs gave a fresh boost to equities and pressured the dollar, but a Chinese embassy spokesperson swiftly disavowed any ongoing talks, demanding Washington lift all unilateral measures first. That seesawed narrative keeps EUR/USD swings choppy: a dip below 1.1315 could re-ignite dollar strength, while any credible breakthrough on trade could spark a rally toward 1.1547.
ECB Dovish Lean Raises Rate-Cut Odds
Across the pond, ECB Governing Council members have signaled growing concern over medium-term inflation falling short of the 2% target. Finnish central bank governor Olli Rehn warned that forecasts might undershoot, while Austria’s Robert Holzmann flagged structural drags on growth. These remarks have fueled market bets that the ECB will cut rates in June, underpinning a softer euro against a dollar still buoyed by implied policy divergence.
Chart Patterns Point to Next Breakout Zones
EUR/USD has coiled within a symmetrical triangle over the past four sessions, currently nestled against the upper trendline near 1.1380. A daily close above 1.1400 would confirm a bullish breakout, targeting a measured move to roughly 1.1500—the April high of 1.1570 sits just beyond as a stretch goal. Conversely, a decisive drop under the lower boundary around 1.1315 would open the door to 1.1276, the July 2023 peak, with a deeper slide to 1.1215 possible if that fails.
Symmetrical Triangle and Bollinger Band Squeeze
The Bollinger Band upper envelope near 1.1647 marks the outer edge of the daily volatility range, but price has yet to test the middle band since the late-April rally. A clean breach of the triangle’s apex would likely catalyze a surge in Average True Range readings, accelerating momentum toward the next pivot zones.
Fibonacci Extremes from 1.1276 to 1.1500
Key Fibonacci retracements of the February-April advance lie at 23.6% (1.1369), 38.2% (1.1335) and 50.0% (1.1215). These align with recent swing lows and moving averages, offering confluence support. On the upside, 61.8% (1.1442) dovetails with the R2 pivot at 1.1450-1.1470, a critical supply zone to overcome before aiming for the 200-day EMA around 1.1640.
Trading Strategy: Buy the Drift, Sell the Rip?
Given the prevailing trend and bullish positioning above major EMAs, playing pullbacks toward 1.1315–1.1335 offers an asymmetric reward-to-risk profile, with stops below 1.1276. Aggressive traders may add on a close above 1.1400, targeting 1.1450 and then 1.1500, while trimming at signs of momentum divergence on the daily chart. If the downside trigger at 1.1315 fails, patience is warranted until price re-engages the 100-day EMA at 1.1250.
Bull Triggers Above 1.1400
A sustained break and retest of the 1.1400 mark, validated by rising volume and a mid-week close above the upper triangle trendline, would reinforce the case for a run at the 1.1500 pivot. The RSI should remain above 60 and Stochastics cross higher near the midrange to signal follow-through.
Bear Triggers Below 1.1315
A convincing move below 1.1315, especially on a daily close, would imply a loss of near-term control and invite a slide to the key 1.1276 support level. Protective stops below that and 1.1215 guard against a sustained bear phase, with volume spikes signaling capitulation.
Buy on dips but remain agile, data-dependent and ready to adapt. Continuous monitoring of US-China trade headlines, ECB rhetoric and US economic surprises—particularly tomorrow’s Q1 GDP and Friday’s NFP—will be vital to navigating what remains a complex EUR/USD landscape.
