The EUR/USD pair showed little inclination for strong movement on Tuesday, despite fresh macroeconomic data from Germany and the broader Eurozone. The readings were mixed: while manufacturing PMIs once again slipped below the key 50.0 threshold, highlighting continued weakness in the sector, services PMIs rose above expectations, offering some relief. Taken together, the data painted a neutral picture, leaving the market with little reason to react decisively.
The euro still holds an upward bias, though the trend is fragile. The pair has been oscillating around the moving average, repeatedly breaking through it in both directions, which often creates confusion for traders. Yet, this choppy behavior has persisted for over a month, and participants may now view it as part of the ongoing consolidation phase. If the pair can maintain its footing above the moving average, it could trigger a new bullish wave that pushes prices beyond recent highs.
From a fundamental perspective, the dollar’s position remains increasingly vulnerable. Although the decline has been gradual, global macro drivers continue to work against the greenback. The most critical factor is the narrowing policy gap between the ECB and the Federal Reserve. While the dollar managed to stay afloat even as the ECB was easing, the situation becomes more challenging as the Fed itself embraces rate cuts. Under such conditions, the U.S. currency struggles to find support.
The only potential lifeline for the dollar lies in political developments. In November, the U.S. Supreme Court may move to block Donald Trump’s tariffs, possibly cooling trade war tensions. However, uncertainty persists about how long such relief could last, given Trump’s history of reinstating tariffs and leveraging new legal avenues to delay adverse rulings. Meanwhile, the ongoing clash between Trump and the Federal Reserve creates further instability. The White House’s growing influence over the Fed could tilt monetary decisions in Trump’s favor by 2026, but for now, easing policy weighs heavily on the greenback.
Technically, the EUR/USD maintains a clear uptrend across timeframes, with nine months of sustained growth and only shallow pullbacks. On September 24, the pair’s 5-day average volatility stands at 78 points, which is moderate. The expected daily range is between 1.1720 and 1.1876. The senior linear regression channel points upward, reinforcing the bullish outlook, while the CCI indicator recently entered the overbought zone, sparking the current correction. However, a new bullish divergence has already formed, suggesting the broader trend remains intact.
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Support levels: 1.1719, 1.1597, 1.1475
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Resistance levels: 1.1841, 1.1963
Trading Recommendations: If the pair remains below the moving average, short positions may be considered with targets at 1.1719 and 1.1597, guided by technical correction signals. However, above the moving average, long positions remain more attractive, with targets at 1.1876 and 1.1963, in line with the prevailing uptrend. With the Fed continuing to ease and Trump’s policies undermining investor confidence, the dollar’s long-term trajectory still points lower, keeping the euro favored overall.
