EUR/USD at a Critical Juncture – Will Bulls Maintain Momentum or Face a Pullback?

As we move through the trading week, all eyes are on high-impact economic events that could significantly influence the forex market. Key reports from the UK, Switzerland, and the USA, including GDP growth, CPI inflation, PPI, unemployment claims, and retail sales data, are expected to shape market sentiment and currency movements.

EUR/USD Price Action & Market Sentiment

The EUR/USD forex pair has exhibited notable volatility recently. After rebounding from its January low, the pair climbed above key technical levels, reaching multi-week highs before encountering retracement pressures.

Currently, EUR/USD is testing critical resistance, with momentum indicators suggesting a potential continuation of the bullish trend if the pair decisively breaks above its current price barriers. The market sentiment surrounding EUR/USD is shaped not only by technical factors but also by geopolitical events and economic data releases.

🔥 High-Impact Economic Events Affecting Forex Markets

🔹 Thursday 09:00 AM (GMT+2) – UK: GDP m/m (GBP)
🔹 Thursday 09:30 AM (GMT+2) – Switzerland: CPI m/m (CHF)
🔹 Thursday 15:30 PM (GMT+2) – USA: PPI m/m (USD)
🔹 Thursday 15:30 PM (GMT+2) – USA: Unemployment Claims (USD)
🔹 Friday 15:30 PM (GMT+2) – USA: Retail Sales m/m (USD)

These key events will play a crucial role in shaping USD strength, which directly impacts the EUR/USD exchange rate.

📊 EUR/USD Chart Analysis & Technical Outlook

Following its January 13 low of 1.01768, marked by a Spinning Bottom candlestick pattern, EUR/USD rebounded sharply, climbing above its 50-period Exponential Moving Average (EMA) to hit a high of 1.05321—a 3% increase.

However, bullish momentum proved unsustainable, leading to a retracement toward 1.02089 on February 3.

📌 Key Technical Indicators:

✅ Current resistance level at 1.04418 is a crucial barrier for further gains.
✅ Momentum Oscillator remains above 100, indicating continued bullish sentiment.
✅ Relative Strength Index (RSI) is above 50, signaling buying pressure remains strong.
✅ EUR/USD is trading above the 20-period & 50-period EMA, supporting a short-term uptrend.

🔎 Potential Bullish Breakout?

The 20-period EMA has not yet crossed above the 50-period EMA, meaning bullish confirmation remains incomplete. A sustained move above 1.04418 could validate further upside potential in EUR/USD.

📈 Key Resistance Levels for EUR/USD Bulls

If buyers maintain control, traders should watch these four key resistance levels:

1️⃣ 1.04418 – The first resistance level, aligning with the daily high from February 5.
2️⃣ 1.05321 – The second resistance, representing the high reached on January 27.
3️⃣ 1.06709 – The third resistance, aligning with the weekly R3 Pivot Point.
4️⃣ 1.08177 – A major upside target, coinciding with the 61.8% Fibonacci Retracement from the 1.12130 high to the 1.01768 low.

📉 Key Support Levels for EUR/USD Bears

If sellers take control, watch these four major support levels:

1️⃣ 1.03234 – The first support, aligning with the weekly Pivot Point (PP).
2️⃣ 1.02760 – The second support, reflecting the swing low from February 10.
3️⃣ 1.01768 – The third support, mirroring the daily low from January 13.
4️⃣ 1.00905 – The final support level, corresponding with the weekly S2 Pivot Point.

🌍 Fundamental Analysis – Key Market Drivers for EUR/USD

🔹 The euro surged 0.5% against the US dollar, driven by optimism over potential US-Russia peace negotiations.
🔹 Geopolitical risk easing weakened demand for safe-haven assets like the USD, boosting the euro exchange rate.
🔹 European stock index futures gained 1%, mirroring Asian market rallies despite higher-than-expected U.S. inflation figures.
🔹 Federal Reserve rate cut expectations shifted, with traders now predicting only one interest rate reduction in December 2025.
🔹 Oil prices declined, reducing geopolitical risk in energy markets, which indirectly supports the euro.

🔍 Conclusion – Will EUR/USD Continue Higher or Reverse?

✔ EUR/USD is at a critical resistance zone, testing 1.04418 as traders await economic data releases.
✔ Technical indicators suggest bullish momentum, but confirmation requires a decisive breakout above key levels.
✔ Fundamental factors, including US inflation data and geopolitical risks, will shape the next EUR/USD trend.

If bullish momentum continues, we could see further gains toward 1.05321 and beyond. However, if EUR/USD fails to break resistance, it may face renewed selling pressure, leading to a pullback toward support levels.

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