EUR/USD weekly price analysis shows the pair trading around $1.173, experiencing moderate volatility with a 0.37% daily gain but a weekly decline of 0.47%. The currency pair finds itself at a crucial inflection point where dollar strength driven by hawkish Fed expectations directly confronts euro resilience supported by improving eurozone economic indicators. This week’s upcoming ECB policy meeting and U.S. PCE inflation data will likely determine whether EUR/USD can maintain its longer-term uptrend that has delivered nearly 2% gains over the past month.
EUR/USD 4-Hour Chart Analysis
The 4-hour chart reveals EUR/USD forming a series of lower highs and lower lows over the past week, with price currently testing a key order block between $1.1720 and $1.1740. Recent price action shows a liquidity sweep below $1.1700 followed by a rapid recovery, suggesting potential stop hunts before the next directional move while a fair value gap remains unfilled around the $1.1760 region.
Buy Prediction: Look for long entries on retracements into the $1.1690-$1.1710 demand zone, confirmed by bullish engulfing candles or RSI divergence. Target the immediate resistance at $1.1785 with stops below $1.1680.
Sell Prediction: Short opportunities may present themselves on rejection from the $1.1785-$1.1800 supply zone, ideally with bearish divergence on momentum indicators. Target the recent swing low at $1.1683 with tight stops above $1.1810.
Daily Chart Analysis
The daily timeframe maintains a cautiously bullish structure despite recent consolidation, with price holding above the crucial 50-day moving average near $1.1650. Institutional accumulation appears visible through multiple bullish engulfing candles on pullbacks, suggesting buyers remain active at key support levels while volume profile shows increasing participation during upward moves.
Buy Prediction: Consider building long positions on pullbacks to the daily demand zone at $1.1620-$1.1650, requiring confirmation from a daily close above the 21-day EMA. Primary target sits at the March high of $1.1950.
Sell Prediction: Shorting remains high-risk given the overall uptrend structure, only becoming viable if price decisively breaks and closes below the $1.1620 support level, which would suggest a potential shift in the intermediate trend direction.
Weekly Chart Analysis
The weekly chart displays a moderate uptrend since January, with EUR/USD establishing higher lows despite periodic consolidation phases. Major weekly demand remains intact around $1.1500-$1.1550, where previous resistance has flipped to support, while the 20-week EMA continues to slope upward, suggesting institutional positioning remains net bullish.
Buy Prediction: Weekly retracements to the $1.1550-$1.1600 zone represent high-probability entry opportunities for position traders, particularly if accompanied by bullish weekly candlestick patterns like hammers or engulfing candles.
Sell Prediction: Weekly timeframe selling isn’t advised within the current market structure unless fundamentals shift dramatically, specifically requiring a hawkish Fed pivot or significant eurozone economic deterioration that would invalidate the prevailing trend.
Monthly Chart Analysis
The monthly chart reveals EUR/USD in a broader consolidation range between $1.1500 and $1.2000 following recovery from 2022 lows, with the pair establishing a series of higher lows indicative of long-term accumulation. Central bank divergence between the ECB and Fed continues to be the primary driver of multi-month price action, with institutional positioning showing gradual euro preference since late 2022.
Buy Prediction: Strategic investors might consider substantial positions on deep retracements to the $1.1400-$1.1500 range, which aligns with the multi-month accumulation zone and represents exceptional value for long-term euro bulls.
Sell Prediction: Monthly timeframe selling would require catastrophic changes to eurozone economic outlook or dramatic shifts in central bank policy divergence, specifically a scenario where the Fed maintains restrictive policy while the ECB pivots to easing.
Technical Analysis
| Level | Price |
|---|---|
| Current Price | $1.173 |
| Critical Support | $1.1680 |
| Immediate Resistance | $1.1785 |
| Major Resistance | $1.1950 |
EUR/USD has formed a descending channel over the past week, with oscillators suggesting the pair is approaching oversold conditions on lower timeframes. The 50-day EMA at $1.1650 continues to provide dynamic support for the broader uptrend, with the pair maintaining higher lows on each significant pullback since January.
Volume analysis shows decreasing selling pressure during recent consolidation, suggesting potential accumulation rather than distribution. A bullish divergence is forming on the daily RSI, which hasn’t confirmed the recent lower price lows – a classic signal that downside momentum may be waning. The immediate technical hurdle for bulls remains the $1.1785-$1.1800 resistance zone, which has rejected three previous attempts this month according to DailyFX technical analysis.
EUR/USD Fundamental Analysis
ECB-Fed Policy Divergence: The European Central Bank is widely expected to cut rates by 25 basis points at its June meeting while the Federal Reserve maintains its restrictive policy stance. This growing policy divergence has applied pressure to EUR/USD in recent weeks as Reuters reports Fed officials have pushed back against rate cut expectations amid persistent U.S. inflation.
Eurozone Economic Recovery: Recent eurozone PMI data showed unexpected improvement, with composite PMI reaching 52.5 in April, signaling continued expansion. This economic resilience has helped limit euro downside despite the stronger dollar backdrop, similar to trends observed when the dollar headed for its first weekly gain in three weeks earlier this year.
Inflation Reports: This week’s eurozone inflation data and U.S. PCE price index will significantly impact EUR/USD, with markets highly sensitive to any surprises that could alter rate expectations for either central bank.
Geopolitical Tensions: Ongoing conflicts in Eastern Europe continue to influence risk sentiment and safe-haven flows, with dollar typically strengthening during periods of heightened uncertainty.
Weekly Outlook
Main Scenario: EUR/USD holding above the $1.1680 support and clearing the $1.1785 resistance → likely continuation of the broader uptrend → targets at $1.1850 followed by $1.1950. This scenario has a 60% probability based on technical indicators and prevailing fundamentals, particularly if eurozone inflation remains elevated and U.S. PCE data shows moderation.
Alternative Scenario: Breakdown below $1.1680 support or persistent rejection at $1.1785 resistance → potential extension of the current consolidation or deeper correction → downside targets at $1.1620 followed by the more significant $1.1550 support. This scenario could materialize if the ECB signals more aggressive rate cuts or if U.S. inflation data strengthens the case for delayed Fed easing.
Traders should monitor the upcoming ECB policy statements and comments from governing council members for clues about the central bank’s future policy path, as rate expectations continue to be the primary fundamental driver for EUR/USD price action.
EUR/USD stands at a pivotal technical juncture where near-term dollar strength confronts the medium-term euro uptrend, with the bias remaining cautiously bullish provided the $1.1680 support holds, though the developing policy divergence between the Fed and ECB suggests increased volatility ahead.
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