In our previous article, “EURUSD Gap Opens as Middle East Tensions Mount – Bearish Outlook Toward 1.1290,” we highlighted downside risks following a geopolitical-driven gap lower. The market initially respected that weakness, but as broader macro and technical signals evolved, so has our view.

The bearish thesis is now neutralised. Instead, we’re observing a bullish reversal structure — and we believe EURUSD may now be trending toward the 1.1960 region.


🔄 What’s Changed Since the Initial Outlook?

📉 Downside Exhaustion

While the pair briefly leaned into the 1.1440–1.1490 zone, selling momentum faded quickly, with no meaningful continuation lower. The price action failed to confirm a breakdown, invalidating the original bearish extension.

🔁 Strong Recovery & Rotation

EURUSD reversed aggressively and climbed back above 1.1600, forming higher highs and reclaiming key moving averages. This shift suggests broad-based USD weakness and possible capital flows rotating into the euro.

🧭 Macro Shifts Favoring the Euro

  • U.S. data surprises have failed to sustain dollar strength.
  • European PMIs and inflation reads are showing resilience.
  • Risk appetite is improving, which historically benefits EURUSD.

📊 Technical Picture: Trend Reversal in Play

On the daily chart, EURUSD has:

  • Cleared descending resistance lines
  • Printed higher lows since mid-June
  • Built a base above 1.1600

We now anticipate a continued climb toward the 1.1960 region, which aligns with key resistance from the late 2023–early 2024 cycle.

Support Levels to Watch:

  • Minor: 1.1620
  • Strong: 1.1440 (prior resistance turned support)

Upside Markers:

  • Near-term: 1.1830
  • Medium-term: 1.1960

🎯 Trading Perspective

The risk-reward landscape has flipped. Rather than pressing shorts, the focus now shifts to bullish continuation setups.

“We now view dips toward 1.1600 as potential long re-entry zones, with 1.1960 as the next strategic target.”


⚠️ Risk Factors to Monitor

  • ECB tone changes or unexpected dovish commentary
  • USD resurgence tied to Fed surprises or geopolitical stress
  • Failure to hold 1.1600 on a closing basis

These would challenge the outlook but do not currently shift the bias.


🔗 Revisit the Original Article

👉 EURUSD Gap Opens as Middle East Tensions Mount – Bearish Outlook Toward 1.1290


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