Key Moments
- EUR/USD has advanced for a second consecutive session, trading just below the mid-1.1400s after buyers emerged in Asia.
- Reduced expectations for a Federal Reserve rate hike have pressured the US Dollar, offering support to the euro.
- Technical signals are mixed, with a bearish flag pattern and key resistance levels suggesting caution before targeting further upside.
EUR/USD Holds Gains as Dollar Softens
The EUR/USD pair is extending its recovery for a second straight session, supported by modest US Dollar weakness as market participants scale back expectations for another Federal Reserve interest rate increase. During the Asian session on Friday, dip-buying activity helped halt Thursday’s slight retreat from the 1.1470-1.1475 area, which marked a nearly two-week high.
Spot prices are now trading just under the mid-1.1400s and appear on track to post a weekly gain for the first time in three weeks, with the softer USD tone underpinning the move.
Technical Structure Signals Both Opportunity and Risk
From a chart perspective, EUR/USD has struggled to secure a clear break above the 23.6% Fibonacci retracement of the April-June decline and was rejected near the resistance line of an ascending channel on Thursday. In the context of the broader pullback, this rising channel outlines a potential bearish flag formation.
This configuration is keeping the upside contained below the 200-period Exponential Moving Average on the 4-hour chart, which strengthens the nearby supply zone and limits bullish follow-through for now.
Momentum Gauges Turn Constructive, But Confirmation Lacking
Momentum studies are offering a mildly positive backdrop. The Relative Strength Index is hovering just below the 60 mark, while the Moving Average Convergence Divergence histogram is marginally in positive territory. Even so, the setup suggests it may be wise to wait for a decisive move above the 23.6% Fibonacci retracement before adopting a more aggressive bullish stance.
A sustained break higher would bolster the case for an extension of the rebound from the 1.1325 zone, which marked the lowest level since May 2025.
Key Levels to Watch on the Upside and Downside
On the topside, the next significant resistance is located near the upper boundary of the ascending channel at 1.1466. If that barrier is cleared, the 200-period EMA at 1.1516, together with the 38.2% retracement at 1.1525, forms a broader resistance band. Above that, additional Fibonacci-based caps are noted at 1.1587 and 1.1649.
Initial support lies at the lower edge of the channel around 1.1371. If selling pressure intensifies, the previous channel starting region near 1.1325 is expected to act as a secondary support floor.
Relative Performance of the US Dollar This Week
The US Dollar has shown mixed performance against major counterparts this week. It was described as the strongest against the Canadian Dollar, while losing ground against several other currencies.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.47% | -1.16% | -0.35% | -0.18% | -0.68% | -1.08% | -0.91% | |
| EUR | 0.47% | -0.75% | 0.13% | 0.26% | -0.23% | -0.67% | -0.50% | |
| GBP | 1.16% | 0.75% | 0.90% | 1.01% | 0.51% | 0.07% | 0.25% | |
| JPY | 0.35% | -0.13% | -0.90% | 0.16% | -0.34% | -0.64% | -0.59% | |
| CAD | 0.18% | -0.26% | -1.01% | -0.16% | -0.50% | -0.80% | -0.67% | |
| AUD | 0.68% | 0.23% | -0.51% | 0.34% | 0.50% | -0.43% | -0.26% | |
| NZD | 1.08% | 0.67% | -0.07% | 0.64% | 0.80% | 0.43% | 0.15% | |
| CHF | 0.91% | 0.50% | -0.25% | 0.59% | 0.67% | 0.26% | -0.15% |
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