EUR/USD: Range-Bound Correction With Bullish Bias

EUR/USD

Prediction: Minor Correction within Medium-Term Uptrend

After a strong rally that pushed EUR/USD up to the 1.1572 peak, the pair is now undergoing a mild correction, currently trading around 1.1322. Price is fluctuating within the 1.1275 – 1.1382 range and has not yet broken above the EMA 34 and 89, indicating short-term selling pressure persists. However, the structure remains above the EMA 200, signaling that the medium-term uptrend is still intact.

FUNDAMENTAL ANALYSIS

Monetary Policy and Fed Impact:

The market is awaiting the Fed's policy decision scheduled for tomorrow. While the Fed is expected to keep interest rates unchanged, investors are closely watching the policy guidance, particularly in light of inflationary pressures from new tariffs.

Market expectations point to a total of 75 basis points in rate cuts during 2025, possibly starting in July.

Inflation and Market Drivers:

Input price indices in the U.S. have surged—highlighting inflationary effects from President Trump’s tariff policies, such as a 100% import tax on foreign films.

Investors expect the Fed to remain flexible in response to price risks but are also waiting for more macroeconomic data and the White House’s reaction.

Geopolitics and Market Sentiment:

The U.S. dollar is under pressure due to the surge of Asian currencies, especially the Taiwan dollar and Chinese yuan. This suggests that Asian economies may allow stronger domestic currencies to gain leverage in trade negotiations with the U.S.

Market sentiment remains uneasy due to inconsistent tariff policies from the White House and lack of real progress in U.S.-China trade talks.

Eurozone Economic Health:

Markets are monitoring April’s PMI data from France, Germany, the U.K., and the broader Eurozone. These figures are expected to reflect the impact of U.S. tariff policies on European supply chains.

Stocks of companies like Ferrari and Telenor are also under watch, following Ford’s downward revision of its annual forecast.

• 1.13828: Immediate resistance, price has frequently rejected from this level
• 1.14842 – 1.15729: Strong Bearish Order Block with heavy selling pressure
• EMA 34 (1.1333) & EMA 89 (1.1313): Short-term dynamic resistance levels

Key Support Levels 

• 1.12753: Nearest support
• EMA 200 (1.1166): Medium-term support preserving the uptrend
• 1.10759: Critical support if a deeper correction occurs

Technical Indicators:

RSI: At 48.88, near neutral—no strong momentum; the market is awaiting the Fed’s signals

EMA (H4): Price is below EMA 34 & 89 → favors short-term correction; price remains above EMA

200 → medium-term uptrend remains intact

Volume: Slight decline in volume → indicates market indecision, awaiting breakout confirmation

 

 

 

 

 

 

 

 

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