The EUR/USD currency pair is experiencing a positive trend at the start of the week, primarily driven by a slight decline in the value of the US Dollar. However, traders are advised to exercise caution as the pair remains under pressure, staying below the significant 1.1200 level during the Asian trading hours. Recent technical analysis highlights that last week’s drop below the 200-period Simple Moving Average on the four-hour chart served as a key indicator for bearish sentiment. Furthermore, the presence of slightly negative momentum indicators on both the four-hour and daily charts continues to suggest that downward movement may be favored.
Should the EUR/USD break past the 1.1200 threshold, it could present an opportunity for short-selling near the 1.1275 to 1.1280 range. Despite the current bearish signals, if buyers manage to push the price convincingly beyond the 1.1300 level, this may trigger a short-covering rally, lifting the pair to potentially higher levels. A sustained move past 1.1300 may lead to a test of the resistance at 1.1400, with further upward momentum possibly reaching towards the 1.1430 range, and ultimately, the psychological barrier at 1.1500. A return to the multi-year peak around 1.1570, last seen in April, may also be on the horizon if bullish momentum strengthens.
Conversely, the pair finds potential support in the vicinity of 1.1130, just ahead of the critical 1.1100 level and the monthly swing low around 1.1080. A decisive move below this lower boundary would reinforce the bearish outlook and heighten the risk of a sharper decline, possibly testing the psychological support at 1.1000. As market developments unfold, the EUR/USD pair may continue to navigate existing hurdles while reflecting broader economic indicators.
