The EUR/USD pair has shown a subtle yet promising recovery from recent lows near the 1.1500 level. After a prolonged downtrend, the market is now attempting to regain bullish momentum, trading around 1.1628 at the time of analysis.
The 4-hour chart clearly indicates that price action has respected multiple Fibonacci retracement levels, suggesting that traders are closely watching key zones for the next directional move.
Currently, EUR/USD has rebounded from the 0.236 Fibonacci level at 1.1600 — a crucial support area. This bounce hints that buyers are regaining control, eyeing the next resistance targets near 1.1700 (0.382 Fib) and 1.1800 (0.618 Fib).
Technical Breakdown
- Current Price: 1.1628
- Immediate Support: 1.1600
- Major Support Zone: 1.1500
- Immediate Resistance: 1.1700 (Fib 0.382)
- Next Key Resistance: 1.1800 (Fib 0.618)
- Overall Trend: Neutral to Bullish
The pair is forming higher lows on shorter timeframes, which typically precedes a breakout attempt. However, the descending channel drawn from the recent highs still limits upside momentum unless price manages a clean close above 1.1700.
A break above that level could open the path to 1.1850–1.1900, where the 0.618 Fib retracement sits — a major technical resistance zone that aligns with a previous supply area.
On the flip side, if EUR/USD fails to sustain above 1.1600, sellers may step back in and drag the price toward 1.1500 or even 1.1450.
Fundamental Backdrop
The euro’s recent weakness was largely driven by sluggish Eurozone data and renewed U.S. dollar strength amid strong Treasury yields. However, investors are now anticipating upcoming ECB and Fed policy signals, which could bring volatility in the coming sessions.
If the European Central Bank adopts a slightly hawkish tone while U.S. data softens, EUR/USD could see a sharp upside correction. Traders are advised to monitor macroeconomic releases and interest rate expectations closely.
Trading Signal (EUR/USD – 4H Setup)
📈 Buy Signal:
- Entry: 1.1630 – 1.1650
- Take Profit (TP1): 1.1700
- Take Profit (TP2): 1.1800
- Stop Loss (SL): 1.1570
📉 Sell Signal (Alternative Scenario):
- Entry: Below 1.1590
- Take Profit (TP1): 1.1500
- Stop Loss (SL): 1.1650
Risk-Reward Ratio: 1:2 minimum
Conclusion
The EUR/USD pair is at a critical juncture on the 4-hour chart. A bullish breakout above 1.1700 could ignite further gains, but failure to hold above 1.1600 would favor short-term sellers. Traders should stay alert for volatility spikes as the week progresses — the battle between bulls and bears is far from over.
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