EUR/USD preserves upleg above SMAs

EUR/USD continues to defend its July–September upleg. Despite its pullback from a four-year high of 1.1917, the bulls managed to secure strong foothold around the 20-day simple moving average (SMA) at 1.1735 on Monday. Recall that the pair has been fluctuating above its short-term SMAs for nearly two months. Therefore, yesterday’s pivot boosted optimism that the bulls are still in town. 

With the Fed preparing a more accommodative monetary policy and the ECB pausing its rate-cut cycle, the euro still carries an advantage, although upcoming data releases could alter policy guidance. German flash business PMI figures for September were mixed earlier today: the services sector showed further expansion to 52.5, while the manufacturing PMI slipped back into contraction below 50. 

From a technical perspective, traders may prefer to remain on the sidelines unless the price reclaims the 1.1800 level. If that happens, the 1.1900 area could act as immediate resistance, and a decisive break above it could open the way toward the 1.2000–1.2050 region. Beyond that, the next barrier may emerge around 1.2150.

On the downside, if the pair falls below its short-term SMAs and the 2025 support trendline, currently located in the 1.1680–1.1740 zone, the bears could push the price toward the 1.1590 region. The 61.8% Fibonacci retracement level of the latest upleg may reinforce that floor. Otherwise, a deeper sell-off could extend toward the 1.1500 area.

In summary, EURUSD appears neutral in the short-term outlook. After its pullback from a four-year high, the bulls need to reclaim the 1.1800 area to revive momentum for a continuation higher.