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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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