EUR/USD sees recovery as market sentiment shifts against the USD

EUR/USD concluded a stable week, trading around the 1.1170 mark, despite earlier momentum favoring the US dollar. Earlier in the week, the dollar surged—its fastest pace since early June—as markets anticipated insights from key Federal Reserve policymakers. However, no definitive data emerged to significantly sway the dollar's trajectory; rather, subtle market expectations about future Fed actions on interest rates seemed to influence movements.

Fed spokeswoman Adriana Kugler expressed support for the recent decision to implement a half-percentage point rate cut but remained non-committal about future monetary policy directions. Meanwhile, Atlanta Fed President Raphael Bostic cautioned against hastening rate reductions, suggesting that the Fed has the luxury of time before making further adjustments.

These mixed signals from Fed officials highlight a lack of consensus among fiscal policymakers, reflecting the complexity of current economic conditions.

Despite initial gains this month, the US dollar faced another downturn towards the week's end, marking its third consecutive day of declines—a pattern extending into a fourth session.

EUR/USD technical analysis

The EUR/USD pair found support at 1.1121 and subsequently formed a growth wave peaking at 1.1188. Currently, the market is shaping a broad consolidation pattern around 1.1155. Today's analysis suggests a potential continuation of the growth wave towards 1.1222, followed by a retest of 1.1155 from above. If successful, the range could expand further to 1.1290. The MACD indicator supports this bullish outlook, with its signal line positioned above zero and pointing upwards, indicating that growth potential remains robust.

The hourly chart, after completing a growth phase to 1.1164 and a correction to 1.1125, the market initiated another upward impulse to 1.1188. Currently, a corrective move to 1.1150 is underway. Upon reaching this level, the potential for a new growth wave to 1.1189 will be evaluated. A breakthrough above this level could signal a continuation of the upward trend towards 1.1222. This scenario is corroborated by the Stochastic oscillator, whose signal line is below 50 and poised to drop towards 20, suggesting a temporary pullback before further gains.