The EUR/USD currency pair remains modestly above the 1.1650 level during Tuesday’s European session, with the outlook tilted towards a short-term bullish phase. Despite the technical signals suggesting a potential upward reversal, investors appear cautious ahead of upcoming major monetary policy decisions from the Federal Reserve and the European Central Bank (ECB). This hesitancy is typical in periods leading up to such influential meetings, where market participants often adopt a wait-and-see approach to avoid premature positioning.
Market sentiment continues to be positive, particularly due to easing tensions in US-China trade relations, which have bolstered risk appetite globally. Early in the week, optimism was reinforced by news of US President Donald Trump signing agreements related to rare earths and minerals with Asian nations. These developments, combined with a decline in the US Treasury 10-year yield, have limited the US dollar’s strength, allowing the EURO to gain against the dollar. Meanwhile, the broader market remains somewhat subdued, awaiting key economic indicators that could influence USD movements, notably the Conference Board’s Consumer Confidence Index for October, due later today. A rise in consumer confidence could lend support to the dollar but is unlikely to trigger significant shifts until after the Federal Reserve’s policy guidance.
On the technical front, the Relative Strength Index has exceeded 60, signaling bullish momentum. The EURO has also broken above a descending trendline, further supporting an upward bias. Immediate resistance is observed at 1.1660, corresponding to the 100-day Simple Moving Average. A sustained move above this level could open pathways to the 1.1690–1.1700 zone, which aligns with the 200-period SMA and a Fibonacci retracement level. Conversely, downside support is observed around 1.1580, with potential areas at 1.1550 and 1.1500 should the pair retreat in response to negative economic data or hawkish signals from the ECB.
