The EUR/USD pair is currently trading within a long-term descending channel, showing a recent bullish reaction from the key demand zone near 1.0390 - 1.0510. Structurally, the market has been forming **lower highs and lower lows**, but the recent price action suggests a potential short-term reversal. Liquidity was grabbed around 1.0376 - 1.0390, indicating institutional accumulation before the push higher. A bullish break of structure (BOS) above 1.0850 would confirm further upside momentum, with price likely targeting the imbalance between 1.0850 - 1.1200 and the major supply zone at 1.1132 - 1.1205. The trade plan involves looking for bullish entries around **1.0514 - 1.0600** upon a retracement, with targets set at 1.0850 - 1.1205, while a stop-loss should be placed below **1.0390** to invalidate the setup.
From a fundamental perspective, the U.S. Federal Reserve’s monetary policy will be a key driver for the pair. If inflation remains persistent, the Fed may delay rate cuts, strengthening the USD and limiting upside potential for EUR/USD. Conversely, if economic data weakens, the Fed may cut rates sooner, fueling bullish momentum in the pair. Meanwhile, the European Central Bank’s stance** on interest rates will also impact EUR strength; if the ECB remains hawkish while the Fed turns dovish, EUR/USD could rally significantly. Additionally, geopolitical risks such as the Russia-Ukraine conflict and the upcoming U.S. elections in late 2024/early 2025 could introduce volatility. If global economic conditions stabilize, investors may shift away from the USD as a safe-haven asset, further supporting EUR/USD’s bullish case.
In conclusion, the short-term outlook for EUR/USD leans bullish, with a potential rally towards 1.1132 - 1.1205, provided price holds above 1.0514 - 1.0600. However, macroeconomic and geopolitical factors must be closely monitored as they could shift sentiment and invalidate the bullish bias. The key confirmation for further upside will be a clean break above 1.0850, while a drop below 1.0390 would signal downside risks. 🚀
From a fundamental perspective, the U.S. Federal Reserve’s monetary policy will be a key driver for the pair. If inflation remains persistent, the Fed may delay rate cuts, strengthening the USD and limiting upside potential for EUR/USD. Conversely, if economic data weakens, the Fed may cut rates sooner, fueling bullish momentum in the pair. Meanwhile, the European Central Bank’s stance** on interest rates will also impact EUR strength; if the ECB remains hawkish while the Fed turns dovish, EUR/USD could rally significantly. Additionally, geopolitical risks such as the Russia-Ukraine conflict and the upcoming U.S. elections in late 2024/early 2025 could introduce volatility. If global economic conditions stabilize, investors may shift away from the USD as a safe-haven asset, further supporting EUR/USD’s bullish case.
In conclusion, the short-term outlook for EUR/USD leans bullish, with a potential rally towards 1.1132 - 1.1205, provided price holds above 1.0514 - 1.0600. However, macroeconomic and geopolitical factors must be closely monitored as they could shift sentiment and invalidate the bullish bias. The key confirmation for further upside will be a clean break above 1.0850, while a drop below 1.0390 would signal downside risks. 🚀
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.