EUR/USD is fluctuating between 1.1790 and 1.1850 following a series of pressured sessions, with short-term movements adhering to a narrow range on both sides of the 1.1800 mark. Throughout the Asian trading session, the pair remained near 1.1790 following three days of declines, with the 14-day RSI positioned around 47. This indicates a reduction in downside momentum, yet it does not present a strong bullish signal. Intraday price action continues to exhibit weakness: each attempt to rally into the 1.1860–1.1870 range faces selling pressure, while pullbacks to the 1.1820–1.1830 area see only minimal buying before the selling resumes. The pair continues to operate within a wider range of 1.1765–1.2000, currently positioned in the lower half of this spectrum. This placement favors sellers, particularly when the market approaches resistance levels. On the daily chart, the 50-day EMA is on an upward trajectory and is currently positioned around 1.1774, with spot trading occurring just above this medium-term indicator. This maintains a slight bullish inclination, albeit to a limited extent. The nine-day EMA has stabilized at approximately 1.1833 following a prior increase and currently serves as a short-term resistance level for any upward movements. While EUR/USD remains confined between the ascending 50-day EMA close to 1.1774 and the horizontal nine-day EMA around 1.1833, the market is experiencing a compression phase: the longer-term trend indicator continues to signal upward movement, yet the shorter average has ceased to validate that trajectory. A decisive daily close above 1.1833 would invigorate the bullish sentiment and create potential for movement toward 1.2000 and even 1.2082. Conversely, a sustained break back below 1.1774 would shift the outlook to bearish, exposing the January low at 1.1578.
The macroeconomic environment continues to support the USD in the EUR/USD pair. Futures are reflecting an anticipated easing from the Federal Reserve, estimating approximately 62 basis points for 2026. This projection suggests two 25 basis point cuts, along with about a 50% likelihood of an additional move later in the year. The initial phase is scheduled for approximately June. The trajectory appears significantly less steep than what market participants anticipated several months back. Recent softer inflation releases briefly encouraged those with a more optimistic outlook, but the latest labor data – showcasing the strongest employment growth in over a year alongside a decline in the unemployment rate – reinforced the notion that the US economy can withstand restrictive policy for an extended period. The Fed minutes have conveyed a hawkish stance, serving as a reminder to markets that any cuts will be implemented gradually rather than aggressively. The current setup maintains high US real yields and restricts the potential decline of the dollar ahead of the upcoming PCE core inflation figures. The dollar index is currently positioned around 97.8–97.9, reflecting an increase of approximately 0.19% for the day. It is maintaining its stance above a significant cluster of Fibonacci supports in the mid-96s, indicating that the greenback is well supported at this level rather than showing signs of vulnerability.
The situation regarding the euro appears less robust. The ZEW surveys for Germany and the broader euro area have shown a decline in February, indicating that the growth momentum continues to be delicate. The EUR lacks a robust domestic catalyst capable of counterbalancing the yield advantage of the US. The near-term euro calendar lacks significant events to alter the current outlook, resulting in the common currency maintaining its status as a carry-unfriendly unit, supported by subdued activity and tight real rates. The EUR shows a slight increase against the CHF, up approximately 0.04%, and remains nearly unchanged against the USD. However, it exhibits a notable decline against higher-risk currencies, decreasing about 0.22% against the AUD and 0.08% against the NZD for the day. The heat map highlights that the weakness of the euro is widespread, extending beyond just EUR/USD. Cross-market signals indicate a prudent risk sentiment that continues to support maintaining a position in USD. Gold has been fluctuating within a wide range approximately between $4,550 and $5,420 per ounce, with recent trading sessions indicating a gradual increase that positions XAU/USD near the $5,000 level. Pullbacks toward $4,850–$4,900 have drawn in buyers, while spikes above $5,100 have faced selling pressure as market participants hedge against the potential for more hawkish communication from the Fed. Recent headlines indicate that the US may be poised to initiate military action against Iran as soon as this weekend, contributing a geopolitical premium to gold and other safe-haven assets. However, this situation has not resulted in a straightforward decline of the USD. US equity indices are showing slight declines, with the Dow hovering around 49,584 (-0.16%), the S&P 500 at approximately 6,870.9 (-0.15%), and the Nasdaq nearing 22,721 (-0.14%).
Meanwhile, the VIX is above 20, currently at 20.16, reflecting an increase of about 2.75%. That is a risk backdrop in which EUR/USD often finds it challenging to maintain a sustainable upward movement. From a purely technical standpoint, EUR/USD continues to be confined within a broad range of 1.1765–1.2000. The 1.2000 level serves as a crucial psychological barrier and upper limit that has thwarted past upward movements. Below that, resistance zones are positioned: 1.1997 and 1.1927 contain previous swing highs, forming a solid barrier of offers. The 1.1890–1.1900 range serves as the central pivot; a daily close above this level would mitigate the current downside pressure, yet it would not, on its own, shift the market sentiment to bullish. The 1.1856 level has served as a strategic pivot in recent sessions, alternating between support and resistance on several occasions. On the downside, 1.1835 has emerged as the primary level of daily support, with 1.1831–1.1835 functioning intraday as a pivotal point: when the pair remains above that range, upward movements occur, and when it breaches that area, continued selling pressure pushes the price down toward 1.1810–1.1800. The structural floor is positioned at 1.1765–1.1766, with the lower boundary of the broader range coinciding with the four-hour 200-period EMA. The market must breach that level to validate a shift from a range-bound state to a downward trend.