Introduction
The Euro (EUR/USD) has shown signs of stabilization after months of weakness driven by a surging U.S. dollar. A strong dollar, fueled by hawkish Federal Reserve policy and resilient U.S. economic data, has kept the euro under pressure. However, recent price action suggests that the euro may have found a bottom, with bullish momentum starting to build.
As of today, Euro FX futures (6E) are trading at 1.04495, up +0.40%, breaking above the 50-day SMA (1.04242) for the first time in weeks. The 1.0350 – 1.0400 support zone has held firm, and RSI is showing bullish divergence.
Technical Outlook
Key Reversal Signs Emerging
- The euro has bounced off support near 1.0350, marking a potential double-bottom formation.
- The 50-day SMA (1.04242) has been reclaimed.
- RSI bullish divergence: While price made lower lows, RSI has made higher lows.
However, major resistance at 1.0630 – 1.0770 must be cleared to confirm a full trend reversal.
Key Support & Resistance Levels
- Resistance Levels:
- 1.0630 – 1.0770 (Previous breakdown zone & 200-day SMA)
- 1.0937 (Longer-term bullish target)
- Support Levels:
- 1.0350 – 1.0400 (Critical demand zone)
- 1.0200 (Deeper support if breakdown occurs)
Momentum & Market Sentiment
- 50-Day SMA: Price has reclaimed it, a short-term bullish sign.
- 200-Day SMA (1.0771): Still above price, long-term trend remains bearish until broken.
- RSI Divergence: Suggests momentum shift, supporting a possible trend reversal.
While the euro remains below major resistance, buyers are stepping in, and momentum is turning in favor of a recovery.
Bull & Bear Scenarios
Bull Case: Breakout Above 1.0630
- If price clears 1.0630, momentum could accelerate toward 1.0770 and beyond.
- RSI shows bullish divergence, suggesting downside exhaustion.
Bear Case: Rejection & Breakdown Below 1.0350
- Failure to break 1.0630 could trigger another leg lower.
- If 1.0350 fails, the next major support is 1.0200.
Final Outlook
- Short-Term (1-2 Weeks): Bullish bias, watching for a breakout above 1.0630.
- Medium-Term (1-3 Months): Neutral to bullish, unless price reclaims the 200-day SMA (1.0771).
- Long-Term (6+ Months): Bearish until 1.0770+ is broken, but signs of bottoming are emerging.
