EUR/USD is trading close to the 1.1000 mark after retreating from earlier gains. Support levels are identified at 1.0975 and 1.0880, while momentum indicators show mixed signals.
The pair’s recent decline follows remarks from Fed Chair Jerome Powell, who expressed concerns over inflation due to new tariffs. He warned that these tariffs might have a greater and more lasting economic effect than originally anticipated.
Technical Perspective Of EUR/USD
Technically, the EUR/USD maintains a bullish outlook despite recent losses. Indicators such as the RSI near 69 suggest diminishing momentum, while the MACD shows a positive trend, albeit with reduced vigour.
Moving averages point to ongoing bullish pressure, yet the pair’s inability to sustain recent highs brings it closer to support at 1.0975, with further support located around 1.0882 and 1.0880. A recovery could set a path to re-test the 1.1110 region.
We’ve seen EUR/USD edge back toward the 1.1000 zone, retreating after failing to hang on to higher territory. The shift came on the heels of Powell’s statements, where he flagged concerns that new import duties could feed more durable price increases than previously thought. He didn’t mince his words — the ripple effects from trade policy may linger, complicating the broader price stability outlook that the Fed watches so closely.
While technicals still reflect a market that’s tilted upward, some signs are flashing yellow. Take the RSI, for instance — sitting just a notch beneath overbought levels around 69, it implies that recent enthusiasm may have cooled. Momentum, though broadly positive, isn’t pushing as forcefully as it did earlier in the month. The MACD, too, while above the signal line, has narrowed its gap, a typical precursor to consolidation if not a pullback.
Despite this ebb in strength, simple moving averages continue to slope upwards across the board, suggesting that broader buying interest hasn’t collapsed — it’s more like it’s taking a breather. So the upward bias remains intact, but the near-term tone feels more cautious.
Key Support And Resistance Levels
Price action around 1.0975 deserves attention. It’s shaping up to be the first meaningful test of downside resilience. Below that, the 1.0880 area looms as a deeper support zone — more distant, but not out of reach, especially if the dollar sees renewed strength. Traders should keep a close eye on how the pair behaves near these levels. We often see buyers re-engage when prices stumble into well-established support, but there’s no guarantee of a bounce every time.
From here, what to watch are the conviction levels during rebounds. If the pair manages to push back toward 1.1070 or even 1.1110 in the days ahead, we’d want to gauge whether the push is driven by broader euro strength or just a lull in dollar demand. Either way, participation — especially during European and US sessions — will tell us whether rallies have muscle or just soft follow-through.
Market participants would benefit from staying nimble. While longer-term signals favour further upside, recent misfires near the highs remind us that chasing into strength carries risks, particularly when key resistance areas have already been tested and abandoned. As ever, watching volume on these moves can help validate whether a bounce is just noise — or the start of a better move.
Sentiment may remain reactive to macro developments, particularly any fresh tariff commentary or inflation signals. We’ll be closely tracking upcoming US data releases, which may force a reassessment of rate expectations. That in turn feeds directly into the greenback’s trajectory — an essential input for this pair.
In this setup, short-duration trades near support or resistance levels could offer sharper entries — assuming a disciplined approach and contingency planning. As we monitor the ebb and flow, much depends on how traders interpret Powell’s remarks. Should fears of persistent inflation build, it’s reasonable to expect front-end US yields to firm up — and that wouldn’t support sustained euro strength.
In the coming sessions, staying alert to structural shifts — not just price levels — may offer a clearer picture. Context from cross-asset flows and reactions after key data will be useful.
