EUR/USD Price Forecast: Looks to build on momentum beyond 1.1735 confluence
- EUR/USD gains some follow-through positive traction amid a broadly weaker USD.
- The divergent Fed-ECB outlooks favor bulls and back the case for additional gains.
- The supportive fundamental backdrop also validates the near-term positive outlook.
The EUR/USD pair attracts fresh buyers near the 1.1710 area during the Asian session on Tuesday and builds on the previous day’s solid bounce from the 1.1660 area, or a nearly four-week low. Spot prices currently trade around the 1.1735 region, up 0.10% for the day, and seem poised to climb further amid a supportive fundamental backdrop.
The US Dollar (USD) drifts lower for the second straight day and moves further away from its highest level since December 10, touched on Monday, amid dovish US Federal Reserve (Fed) expectations. Furthermore, bets that the European Central Bank (ECB) is done cutting rates seem to support the shared currency and act as a tailwind for the EUR/USD pair.
An intraday strength beyond the 1.1735 confluence – comprising the 100-hour Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the 1.1808-1.1660 fall – validates the positive outlook. Moreover, the Moving Average Convergence Divergence (MACD) has turned positive and edges higher, hinting at improving upside momentum.
Adding to this, the Relative Strength Index (RSI) at 59 supports further gains, with the 61.8% Fibo. retracement level, around mid-1.1700s, forming the next resistance. A push through these barriers would strengthen the corrective tone, whereas failure to clear them would leave EUR/USD vulnerable to renewed consolidation within the recent range.
(The technical analysis of this story was written with the help of an AI tool)
EUR/USD 1-hour chart
