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16/10/25
53
EUR/USD Holds Steady Near 1.1650 Amid Bullish Momentum
The EUR/USD currency pair has been trading within a narrow range around 1.1650, maintaining its short-term bullish momentum. Earlier in the week, the pair reached a peak above 1.1670, marking its highest level in over a week before retreating slightly. Current technical indicators suggest that the bullish bias remains intact, provided the pair can sustain above key support levels, specifically around 1.1650. Should the pair hold above this level, there is potential for further upward movement toward resistance levels at 1.1700 and potentially 1.1765, the latter aligning with a Fibonacci retracement level. Conversely, a failure to maintain current support could see the pair test lower levels around 1.1580 and 1.1550.
Market sentiment continues to be influenced by broader risk appetite, which is supported by optimism in equity markets. US stock futures have registered modest gains, which could foster a risk-on environment that favors currencies other than the US dollar. This shift in risk sentiment has helped the euro, which strengthened against some currencies amidst relative US dollar weakness. In the absence of significant economic data releases, geopolitical factors — particularly US-China trade relations — remain a key influence on currency movements.
Major central bank speakers are scheduled to deliver remarks throughout the day. The market currently prices in a high likelihood of two additional interest rate cuts by the Federal Reserve within the year, a factor that may keep the dollar under pressure if policymakers do not oppose a potential rate reduction. Meanwhile, the European Central Bank’s President Christine Lagarde will participate in a discussion on global economic policy, alongside Federal Reserve officials whose speeches could provide additional insights into future monetary policy prospects.
Technical readings reinforce the current outlook, with the Relative Strength Index just above 60 on the four-hour chart indicating sustained short-term bullishness. However, the pair’s inability to decisively break above 1.1650-1.1670 could lead to renewed hesitation among traders, emphasizing the importance of support at 1.1650 for maintaining upward momentum. Overall, developments remain sensitive to risk sentiment and macroeconomic data, which continue to shape euro dynamics in the current environment.
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