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The euro is steadying as markets assess recent trade developments and shifting sentiment. With momentum uncertain, traders are watching technical signals and central bank cues. This analysis explores what’s next for EUR/USD.
Euro steadies after recent pressure
The euro edged higher on Thursday, rising 0.1% to reach $1.1429. However, the common currency continues to trade below the psychologically significant $1.15 barrier.
This modest recovery in EUR/USD comes after recent downward pressure, driven by growing concerns that the current US-EU trade agreement may be skewed in favour of Washington, potentially disadvantaging the eurozone.
According to our market analysts, the recent softness in the euro may be part of a natural correction after an extended period of bullish positioning.
This implies that although short-term pressure could persist, the downside may be limited as traders revisit the broader economic fundamentals.
Technical analysis
EUR/USD opened around 1.14087 and dipped to a session low of 1.14002 in early trading on 31 July, before staging a minor recovery to touch 1.1437.
Since then, the currency pair has been moving within a narrow range between 1.1400 and 1.1440, showing no strong directional bias.
Picture: EURUSD holds above 1.1400 after bounce, but momentum lacks strength, as seen on the VT Markets app.
The moving averages (5, 10, 30) paint a mixed technical picture. While the price remains marginally above the shorter-term MAs, the flattening slopes indicate fading momentum.
The 30-period moving average has acted as dynamic resistance later in the session, effectively capping any attempts to push higher.
The MACD indicator also signals indecision, hovering near the zero line with minimal divergence.
Although the histogram has turned slightly positive, both the MACD and signal lines are flat and tightly aligned, suggesting a lack of conviction among traders and low volatility.
Support is established around the 1.1400 level, a key psychological and technical floor. Resistance lies near 1.1440 and 1.1460. A clear break above this zone could pave the way for a test of the $1.1500 level, although this would likely depend on fresh macroeconomic catalysts or shifts in US dollar sentiment.
Cautious forecast
In the short term, EUR/USD is likely to remain range-bound between 1.1400 and 1.1450, unless driven by unexpected economic data or policy surprises.
Low volatility and uncertain momentum suggest that traders are staying cautious and awaiting clearer signals.
A break below 1.1400 could open the door to 1.1350, particularly if US data beats expectations or risk sentiment weakens.
On the upside, resistance around 1.1440–1.1460 remains intact. A sustained move higher would need to overcome this zone to target the key 1.1500 level – though this would likely require softer USD data, dovish Fed signals, or stronger eurozone figures.
Looking ahead, the medium-term outlook depends on how markets interpret the US-EU trade deal and future guidance from the ECB.
As policymakers weigh inflation against weak growth, sudden shifts in expectations could trigger volatility.
For now, traders may remain on the sidelines, watching macro trends and central bank commentary for direction.
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