EUR/USD Weekly Analysis: Dollar Strength Persists as Fed Hawks Maintain Control

EUR/USD weekly price analysis shows the pair trading near $1.151, down 0.66% over the past week as hawkish Federal Reserve rhetoric continues to support dollar strength. The currency pair faces mounting pressure after failing to hold above the critical $1.160 level, with Fed Governor Christopher Waller’s latest comments suggesting a more patient approach to rate cuts. This week’s PCE inflation data and European CPI figures will likely determine whether the current downtrend accelerates.

EUR/USD 4-Hour Chart Analysis

The 4-hour structure shows a series of lower highs and lower lows, with price recently breaking below the key order block at $1.1580-1.1600. A significant liquidity sweep occurred at $1.1508, creating a fresh demand zone that bulls need to defend. Fair value gaps remain unfilled above $1.1590.

Buy Prediction: Look for long entries on retracements into the $1.1510-1.1530 demand zone, confirmed by bullish engulfing candles. Target the $1.1580 resistance with stops below $1.1500.

Sell Prediction: Short opportunities present themselves on rejections from the $1.1580-1.1600 supply zone, targeting $1.1480 with tight stops above $1.1615.

Daily Chart Analysis

The daily trend remains bearish below the declining 20-day EMA, with institutional selling pressure evident in the increasing volume on down days. Major daily structure at $1.1620 acts as strong resistance, while the $1.1480 support level shows signs of weakening.

Buy Prediction: Daily timeframe longs require a close above $1.1620 with increasing volume, targeting $1.1680.

Sell Prediction: High-probability shorts present on failed retests of $1.1580, targeting the $1.1450 support zone.

Weekly Chart Analysis

Weekly momentum indicators signal persistent bearish control, with price respecting the descending trendline from January highs. Institutional positioning data shows growing short interest, aligning with the broader dollar strength narrative discussed in our liquidity cycles analysis.

Buy Prediction: Consider accumulation only on deep retracements to $1.1450-1.1480 weekly demand zone.

Sell Prediction: Maintain bearish bias below $1.1620 weekly resistance.

Monthly Chart Analysis

The monthly chart shows EUR/USD struggling below major historical resistance at $1.1700, with institutional flow data indicating sustained dollar demand. Central bank divergence between Fed and ECB policy paths continues to pressure the pair.

Buy Prediction: Monthly accumulation zone exists at $1.1380-1.1420 historical demand.

Sell Prediction: Monthly structure remains bearish below $1.1700, supporting continued distribution.

Technical Analysis

Technical indicators show increasing bearish momentum, with the RSI forming lower highs on multiple timeframes. The MACD histogram displays growing negative momentum, while price remains below all major moving averages. Volume analysis confirms distribution patterns, particularly on approaches to the $1.1580-1.1600 resistance zone.

EUR/USD Fundamental Analysis

Recent fundamental developments suggest continued pressure on EUR/USD, with mounting pressure on the ECB to cut rates while Fed officials maintain a hawkish stance. Key drivers include:

Monetary Policy Divergence: Fed’s data-dependent approach contrasts with ECB’s increasing dovishness.

Economic Growth Differential: US economic resilience versus eurozone’s sluggish recovery.

Upcoming Catalysts:

• US PCE inflation data

• European CPI figures

• Employment reports from both regions

Weekly Outlook

Main Scenario (60% probability): Continued weakness below $1.1580 targets $1.1480 support, with potential for $1.1450 on strong US data.

Alternative Scenario (40% probability): Recovery above $1.1580 could trigger short covering toward $1.1620, requiring weak US data and dovish Fed commentary.

The EUR/USD enters a critical week as traders await key inflation data that could cement near-term direction. While technical structure favors further dollar strength, much depends on upcoming economic releases and central bank messaging.