EUR/USD Price Forecast: Bullish Bias Persists While Above 1.1700, Supported by 100-SMA on H4 Chart
The EUR/USD currency pair has started the week on a positive trajectory, buoyed by growing optimism surrounding a trade deal between the United States and the European Union (EU). During the Asian trading session, the pair climbed to around the 1.1770 level, reflecting renewed confidence in the euro amid favorable international developments. Despite this upward movement, the pair has faced resistance in extending gains, as many traders remain cautious, opting to await significant upcoming events.
Technical Outlook: Dip-Buying Supported by 100-Period SMA
From a technical standpoint, the EUR/USD remains firmly supported above the 100-period Simple Moving Average (SMA) on the four-hour (H4) chart, which currently sits near the critical 1.1700 level. This technical indicator is serving as a pivotal point for maintaining the pair’s bullish momentum.
In addition, positive signals from oscillators on both daily and hourly charts reinforce the possibility of further upward movement. However, to confirm a sustained bullish trend, traders are advised to watch for a decisive break above the daily swing high near the 1.1770 area before committing to new long positions.
If the pair manages to breach this resistance, it could set its sights on the psychologically significant 1.1800 mark and potentially push higher toward the 1.1830 level—the highest seen since September 2021, reached earlier this month. Success beyond this point may propel the EUR/USD toward the 1.1900 round figure, extending the year-to-date uptrend that originated from the January lows around 1.0180–1.0175. ### Potential Support Levels and Downside Risks
On the downside, the 100-period SMA on the H4 chart near 1.1700 is expected to act as robust support. Should the pair test this level, dip buyers may emerge, viewing the pullback as an attractive entry point. Further support is anticipated around the 1.1640 zone, which should help mitigate losses near the 1.1600 figure.
A convincing break below 1.1600, however, could expose the pair to vulnerability, leading to a retest of monthly lows in the vicinity of 1.1560–1.1555. Continued selling pressure might then target psychological levels of 1.1500 and subsequently the 1.1450–1.1455 region, with a further slide toward 1.1400 also possible.
Market Sentiment and Upcoming Events
While the technical backdrop signals a bullish bias, market participants are displaying caution ahead of the upcoming two-day Federal Open Market Committee (FOMC) meeting, commencing Tuesday. This meeting is anticipated to be a key driver for USD moves and could significantly influence EUR/USD volatility.
In addition, traders await several important U.S. macroeconomic data releases throughout the week. These reports may shape expectations on future US monetary policy and thus impact the dollar’s strength against the euro.
Understanding the Euro’s Dynamics
The euro, the official currency of the Eurozone’s 19 countries, remains the world’s second most traded currency after the US dollar. The EUR/USD pair is the most actively traded currency pair worldwide, accounting for approximately 30% of daily forex transactions.
The European Central Bank (ECB), headquartered in Frankfurt, oversees the euro’s monetary policy. Its mandate to maintain price stability—mainly through interest rate adjustments—profoundly affects the euro’s valuation. Economic data such as inflation, GDP growth, employment figures, and trade balances from major Eurozone economies (Germany, France, Italy, and Spain) also contribute to the currency’s performance.
Summary
In summary, the EUR/USD shows a bullish bias as long as it remains above the 1.1700 mark and the 100-period SMA on the H4 timeframe. Breaking and sustaining above 1.1770 could open the door for further gains toward 1.1800 and beyond. However, traders are cautioned to remain alert to upcoming FOMC policy decisions and US economic data, which may inject volatility and influence the pair’s direction.
Investors and traders should continue monitoring technical levels and fundamental news to navigate this key forex pair effectively.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. FX trading involves significant risk, and you should conduct your own research before making any trading decisions.