The Euro is slightly dipping against the US Dollar but is staying above the 1.17 support level this midweek. Traders are looking forward to the upcoming CPI data from Germany and France, while ECB council member Vujcic has made neutral statements, suggesting that interest rates should remain unchanged due to concerns about short-term targets. The difference in interest rates helps support the Euro, especially as US yields stabilize after the Non-Farm Payroll report. Ongoing trade talks between the US and EU also provide a positive outlook for the Euro. However, recent pullbacks have slowed momentum. Traders are spotting potential support between 1.1650 and 1.1680, with resistance beyond 1.1780.

Multi-Month Trend Remains Upwards

The overall trend remains positive, with the Euro holding strong above 1.15 and the 50-day moving average at 1.1450. This area is considered a medium-term support level, vital for the Euro’s continued rally. Trading comes with risks, so it’s essential to do thorough research before making decisions. Despite some downward pressure, the Euro’s position above 1.17 signals stability. Traders should focus on this structure instead of worrying about minor declines. The positive momentum observed in recent months is still intact, with prices comfortably above the key support level near 1.15 and the 50-day moving average, indicating that sentiment remains strong. Vujcic’s neutral comments indicate a wait-and-see approach without urgent policy changes. This situation lowers volatility, especially if inflation continues to drop in the upcoming CPI data from Germany and France. These figures will affect not only local consumption forecasts but also expectations throughout the region. Short-term price action might remain flat until this information is released. Yields have begun to stabilize since the US jobs data surge, providing some support for the Euro. However, this support is based more on expectations than on changes in policy. This approach works if you are trading based on trends, but entering too early—before major economies release inflation numbers—can increase risk. The price levels between 1.1650 and 1.1680 are where buyers seem ready to re-enter, so any short-term dips to this area may present good re-entry points for those who missed the earlier upswing.

Resistance Levels Are Crucial

Resistance is less clear at the top, but traders seem cautious around 1.1780. A strong break above this level might change the market’s volatility, leading to a reevaluation of the Euro based on broader optimism. Traders dealing with options spreads, especially in the short term, might opt for a more careful approach until a breakout is confirmed. The broader trend earlier in the quarter shows that there is still demand for Euros, even though momentum has slowed due to recent GDP and inflation issues in the US. Current price movements are more about adjusting than reversing. The 1.1450–1.1500 zone remains a crucial support level for trend followers. If prices test this area with significant volume, it would need to be reassessed, but the upward bias still holds for now. What’s happening now looks more like market consolidation rather than a reversal. Indicators such as future curves, cross-market correlations, and volatility readings suggest a pause instead of a new cycle beginning. Thus, any significant revaluation might require more than just domestic data; it likely needs coordinated signals from both the US and Europe. We believe the space between 1.1650 and 1.1780 will be where notable trading activity occurs in the next sessions. Traders focusing on medium-term strategies may consider these levels, as long as liquidity remains stable and options markets aren’t anticipating excessive volatility. Create your live VT Markets account and start trading now.

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