The euro strengthened at the start of the week, with EUR/USD reclaiming the 1.1600 level during Asian trading as the U.S. Dollar continued to retreat broadly. The move revives bullish interest that has been building steadily over the past week, though traders remain cautious as the pair approaches the 200-day Simple Moving Average (SMA)—a level that has consistently capped upward momentum.
Short-term technical signals support the improving tone. The 20-period SMA has crossed above both the 50- and 100-period averages, pointing to a constructive setup. However, the flattening 200-period SMA near 1.1585 remains a critical barrier. Momentum indicators also show restraint, with the 14-day RSI at 51, reinforcing the pair’s range-bound nature.
Measured against the recent swing high of 1.1885 and low of 1.1472, EUR/USD has already reclaimed the 23.6% Fibonacci retracement at 1.1569, while the 38.2% retracement at 1.1630 stands as the next upside target.
Current Technical Levels in Focus
Key support and resistance levels now shaping market sentiment include:
- Resistance: 1.1585 (200-day SMA), 1.1630 (38.2% retracement)
- Support: 1.1569 (23.6% retracement, 100-period SMA), 1.1500 and 1.1470 (static lows)
A daily close below 1.1569 could expose the pair to a deeper pullback toward the 1.1500 psychological level. Conversely, a decisive break above the 200-day SMA may confirm bullish continuation.
Euro Struggles as European Data Disappoints
Despite early-week gains, EUR/USD faded on Friday toward 1.1550, losing upward traction as markets digested softer German macro data. October German Retail Sales fell 0.3%, reversing the prior month’s modest rise and undershooting expectations for a 0.2% increase. The weak print weighed on euro demand and added pressure to the pair’s intraday outlook.
Traders are now focused on Germany’s November CPI release, where analysts expect a 0.3% monthly decline. While an upside surprise could momentarily support the euro, thin liquidity conditions may limit sustained directional moves.
Month-End Flows Add Volatility Risk
With U.S. markets observing an early Black Friday close and liquidity thinning across major currency pairs, month-end rebalancing is likely to amplify price swings. These flows, often disconnected from fundamentals, can create erratic movement heading into the weekend.
For now, EUR/USD remains supported by a weaker dollar, but a break above the 200-day SMA—or a fresh rejection—will determine whether the pair extends its recent uptrend or rotates back into its broader consolidation range.
