EUR/USD weekly price analysis shows the pair trading at $1.179, up 0.54% over the past week as it recovered from a mid-week dip to $1.1690. The currency pair finds itself at a critical technical juncture where waning ECB rate cut expectations clash with mixed US economic signals. This week’s price action was primarily driven by the ECB’s steadfast monetary policy stance and unexpectedly resilient Eurozone economic indicators that bolstered the common currency.
EUR/USD 4-Hour Chart Analysis
The 4-hour timeframe shows EUR/USD has established a series of higher lows since the $1.1690 bounce, with price now testing a significant resistance zone at $1.1790-$1.1800. A notable liquidity sweep occurred at Wednesday’s lows before bulls reclaimed control, creating a fair value gap between $1.1720-$1.1740 that remains unfilled.
Buy Prediction: Look for entries on pullbacks to the $1.1745-$1.1760 demand zone, confirmed by bullish engulfing candles or rejection wicks. Target the immediate resistance at $1.1820 with stops below $1.1720.
Sell Prediction: Counter-trend shorts are high-risk but possible on rejection from the $1.1790-$1.1800 resistance zone with confirmation of bearish divergence on RSI. Target the $1.1720 support with tight stops above $1.1810.
Daily Chart Analysis
The daily structure remains in a consolidative pattern within the broader uptrend, with price respecting the ascending trendline from March lows. Institutional accumulation signals appear in the form of increased volume on up-days compared to down-days, suggesting underlying strength despite recent choppy price action.
Buy Prediction: Strategic long entries can be considered on retests of the $1.1720 support zone or the rising 20-day EMA (currently near $1.1710), targeting the recent high of $1.1840 and potentially the yearly high at $1.1950.
Sell Prediction: Daily timeframe selling carries elevated risk given the intact uptrend. Only consider shorts if price breaks and closes below the key support at $1.1680, which would signal a potential trend change.
Weekly Chart Analysis
The weekly chart displays a multi-month uptrend with strong momentum, evidenced by the positive slope of the 8-week EMA. The weekly demand zone at $1.1650-$1.1700 provided solid support during the recent pullback, and positioning data shows continued institutional interest in EUR longs.
Buy Prediction: Weekly retracements to the $1.1650-$1.1700 zone offer excellent risk/reward for position building, particularly with bullish weekly candle closes. Target the $1.1950 resistance followed by the psychological $1.2000 level.
Sell Prediction: Weekly timeframe selling is not recommended in the current uptrend unless fundamental catalysts trigger a broad USD strength regime or the ECB unexpectedly signals rate cuts, which would invalidate the current bullish narrative.
Monthly Chart Analysis
The monthly chart reveals EUR/USD continues its recovery from the 2022 lows, with price respecting the multi-year support at $1.1500. Long-term institutional positioning suggests a gradual shift away from extreme USD bullishness that dominated 2021-2022, with central bank reserve diversification providing underlying support.
Buy Prediction: Major retracements toward the $1.1500-$1.1600 zone represent investment-grade entries for long-term positions, targeting the $1.2200-$1.2500 range over a 6-12 month horizon.
Sell Prediction: Monthly timeframe selling would only be justified by catastrophic Eurozone economic deterioration or a severe risk-off event triggering flight to USD safety. The current macro environment doesn’t support such a scenario.
Technical Analysis
| Level | Price |
|---|---|
| Current Price | $1.179 |
| Critical Support | $1.1720 |
| Immediate Resistance | $1.1800 |
| Major Resistance | $1.1950 |
EUR/USD’s technical structure shows resilience after a successful defense of the $1.1690 support level. The RSI(14) on the daily timeframe reads 58, indicating moderate bullish momentum without reaching overbought territory. The MACD histogram shows shallow positive bars, suggesting momentum remains positive but may be slowing.
The price is currently trading above all major moving averages (50-day, 100-day, and 200-day), confirming the underlying bullish bias despite recent consolidation. A symmetrical triangle pattern has formed on the daily chart, with the apex converging around $1.1750. According to DailyFX technical analysis, this pattern typically resolves in the direction of the prevailing trend, suggesting a potential upside breakout scenario.
EUR/USD Fundamental Analysis
ECB Rate Cut Expectations: Recent ECB policy statements have pushed back against early rate cut expectations, with officials emphasizing the need to see more evidence of sustained inflation decline. This contrasts with shifting market dynamics in other economies and has provided short-term support for the euro.
Eurozone Economic Resilience: Preliminary Q1 GDP data showed unexpected strength at 0.3% quarter-on-quarter, outpacing expectations and contrasting with previous recession fears. Additionally, April inflation came in slightly above consensus at 2.4% year-on-year, reducing immediate easing pressure.
US Employment Data: The latest non-farm payrolls report indicated a cooling labor market with 175,000 jobs added versus an expected 190,000, while unemployment ticked up to 3.9%. This has tempered Federal Reserve hawkishness, weighing on the dollar.
Interest Rate Differentials: The spread between US and Eurozone yields has narrowed slightly as markets price in potentially earlier Fed easing compared to the ECB, creating a fundamental tailwind for EUR/USD that could extend if this divergence continues.
Weekly Outlook
Main Scenario: EUR/USD holds above $1.1720 and breaks through resistance at $1.1800 → likely to extend gains toward $1.1850, potentially testing $1.1900 if US data disappoints → probability 60%.
Alternative Scenario: Failure to hold $1.1720 support or rejection at $1.1800 resistance → could trigger retracement toward the key $1.1680-$1.1690 zone → extended decline possible to $1.1650 only if accompanied by surprisingly hawkish Fed comments or deteriorating Eurozone economic data.
Traders should monitor the upcoming Eurozone industrial production figures and US retail sales data, which could provide the next directional catalyst. According to market sentiment indicators, positioning remains moderately bullish on EUR/USD, suggesting room for further appreciation if technical breakouts materialize.
The EUR/USD finds itself balancing between ECB policy stability and softening US economic data, with technical structure suggesting a slight bullish bias contingent on holding the $1.1720 support and successfully breaching the immediate $1.1800 resistance level.
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