The EUR/USD is following a well-defined technical script after the ECB's 25-basis-point rate cut. The pair initially dropped to a low of 1.0463, just above the upper boundary of a key swing area between 1.0448 and 1.0461. Buyers stepped in at this risk-defining level, triggering a rebound.
The subsequent upside move took the price toward the 100-bar moving average (MA) on the 4-hour chart, located at 1.0518. Just above that, the 200-hour MA at 1.0528 provided another resistance zone. The high reached 1.05202, stalling below these critical MAs.
Technical Overview:
- Resistance Cluster: The 100-bar MA on the 4-hour at (1.05218) and 200-hour MA (1.0528) have capped gains for the past two days, with sellers leaning on these levels.
- Support Zone: 1.0448–1.0461 – A revisit to this area could attract buyers again if the price remains below the moving averages.
Scenarios:
- Bullish Case: A break above the 200-hour MA at 1.0528 would open the door to further gains, targeting the next swing resistance between 1.0592 and 1.06097.
- Bearish Case: Staying below the moving averages keeps sellers in control, potentially leading to a retest of the 1.0448–1.0461 support zone.
The price action is adhering closely to key technical levels, with the battle between buyers and sellers centered around these pivotal areas.
