EUR/USD has risen sharply this month, reclaiming its 200-day moving average (200-DMA) at 1.0725. This level is now seen as a potential short-term support zone.
Resistance has emerged around the 1.0950 mark, while the daily MACD has declined after reaching multi-month highs. Although this does not indicate a reversal, it suggests diminishing upward momentum.
Possible Pullback Scenario
A brief pause in the currency’s movement is possible, and if the 1.0950 level remains unbroken, a pullback may occur towards the 200-DMA at 1.0760/1.0725.
The euro’s bounce above the 200-day moving average highlights a shift in sentiment, at least for now. With the currency pair approaching 1.0950, traders have begun to take notice of waning momentum. The daily MACD, having touched levels not seen in months, is now dipping. This alone does not point to an outright reversal, but it raises questions about the strength of the current push higher.
If resistance remains firm near 1.0950, we may see traders opting to reduce exposure, increasing the likelihood of a retracement towards the 200-day moving average, which sits in the 1.0760–1.0725 range. That zone remains key, as it previously acted as a barrier before being breached. Now that it has been reclaimed, traders will likely pay close attention to whether it holds up as support. If it does, dip buyers could step in once more. If not, momentum could shift and trigger a more extended decline.
Watching Key Levels
While short-term traders will be watching intraday price action near resistance, those with a longer horizon may be mindful of broader trends at play. Should the pair struggle to break through 1.0950 convincingly, a consolidation phase could develop. If sellers become more aggressive, focus may shift back to the support area that was recently recaptured. The behaviour of price action in the 1.0760–1.0725 range could offer an indication of whether the bullish structure remains intact or if a deeper retracement is on the horizon.
For now, momentum has slowed but has not yet shifted in the opposite direction. Traders will be observing closely, particularly in the coming sessions, to see whether the 1.0950 barrier holds or if enough buying pressure emerges to push beyond this level. If the latter happens, upside targets could extend towards the previous peaks. However, if resistance remains firm, markets may witness a temporary pullback towards the recently reclaimed moving average.
