- EUR/USD struggles for a firm intraday direction and remains confined in a narrow band.
- The technical setup favours bulls and supports prospects for some meaningful upside.
- Rising bets for a rate cut by the Fed and the ECB in June keep traders on the sidelines.
The EUR/USD pair continues with its struggle to gain any meaningful traction on Wednesday and oscillates in a narrow trading band below the 100-hour Simple Moving Average (SMA) during the Asian session. Spot prices currently trade around the 1.0925 area, unchanged for the day as traders await more cues about the Federal Reserve’s (Fed) rate-cut path before positioning for a firm near-term direction.
The US consumer inflation for February came in a bit warmer than expected and fuelled speculations that the Fed may delay interest rate cuts, which, in turn, is seen acting as a tailwind for the US Dollar (USD). In contrast, the European Central Bank (ECB) officials overwhelmingly back the case for the first rate cut in June and have also floated the idea of a further move in July. This undermines the shared currency and further contributes to capping the upside for the EUR/USD pair.
Meanwhile, the markets are still pricing in a greater chance that the US central bank will start cutting interest rates in June. This is reinforced by a fresh leg down in the US Treasury bond yields, which, along with the prevalent risk-on environment, holds back traders from placing aggressive bullish bets around the safe-haven buck and lends some support to the EUR/USD pair. Hence, it will be prudent to wait for strong follow-through selling before positioning for any further decline.
From a technical perspective, spot prices showed some resilience below the 23.6% Fibonacci retracement level of the February-March rally and for now, seem to have stalled the recent pullback from the 1.0980 area, or a near two-month high touched last week. Moreover, oscillators on the daily chart are holding in the positive territory and are still away from being in the overbought zone, which favours the EUR/USD bulls. The lack of any meaningful buying, however, warrants some caution.
In the meantime, the overnight swing low, around the 1.0900 round-figure mark, is likely to protect the immediate downside ahead of the 1.0870 area, or the 38.2% Fibo. A convincing breakthrough might expose the 50% Fibo. level, around the 1.0840-1.0835 region, below which the EUR/USD pair could turn vulnerable and accelerate the downfall further towards testing sub-1.0800 levels, or the monthly through.
On the flip side, the 1.0945-1.0950 zone could act as an immediate hurdle ahead of the 1.0980 region, or the monthly peak, and the 1.1000 psychological mark. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent goodish recovery from sub-1.0700 levels, or the YTD low touched on February 15. The EUR/USD pair might then climb to the 1.1045-1.1050 intermediate resistance en route to the 1.1100 round figure.
EUR/USD 1-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD climbs toward 1.1350 on renewed USD weakness
EUR/USD gains traction in the European session on Friday and advances toward 1.1350. Growing concerns about the US fiscal outlook and government debt after the US House of Representatives passed President Trump's tax bill weigh on the US Dollar and help the pair push higher.
GBP/USD rallies to fresh multi-year high near 1.3500
GBP/USD capitalizes on the heavy selling pressure surrounding the US Dollar and trades at its highest level since February 2022 near 1.3500 in the European session on Friday. The data from the UK showed that Retail Sales rose by 1.2% in April, surpassing the market expectation of 0.2% and supporting Pound Sterling.
Gold reverses direction following technical correction, advances to $3,330
Gold gathers bullish momentum and climbs to the $3,330 region on Friday. The broad-based USD weakness on government debt concerns and the cautious market mood helps XAU/USD push higher. Several Fed policymakers will be delivering speeches later in the day.
Avalanche Price Forecast: AVAX eyes $30 as FIFA, VanEck back blockchain ecosystem
Avalanche (AVAX) is gaining bullish momentum, extending gains on Friday, trading at $25.74 as investor confidence grows on the back of two major developments. FIFA, football’s global governing body, has announced plans to build its own Layer-1 blockchain on the Avalanche network.
FOMO vs fundamentals: Retail buys the dip, institutional investors stay cautious
Retail optimism is rising, but institutions are still treading carefully amid lingering macro and earnings risks. Policy and fiscal uncertainty remain elevated, with trade tensions, U.S. debt concerns, and a cautious Fed dominating the backdrop.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.