The EUR/USD currency pair has shown stability over the past week, maintaining a trading range above the 1.1644 level. Analysts suggest that the outlook remains neutral as the pair continues to hover below the 1.1819 resistance point. A decline is anticipated as long as this resistance holds. Should the currency pair break through the 1.1644 mark and sustain trading below the 55-day Exponential Moving Average (EMA), currently at 1.1675, this would imply a potential medium-term top at 1.1917, particularly given the bearish divergence observed in the Daily MACD indicators. If this pattern holds, a drop to the 1.1390 support level is likely.
Conversely, if the EUR/USD manages to surpass the 1.1819 resistance level, it could reestablish a bullish trend and prompt a retest of the recent high at 1.1917.
From a broader perspective, the rise from the recent low of 1.0176 is interpreted as the third leg of the price pattern stemming from the 2022 low of 0.9534. The market has already met the 100% projection of the movement from 0.9534 to 1.1274 based on the rise from 1.0176 at 1.1916. As long as the 1.1390 support level holds firm, further rallies are likely. A significant break above the psychological barrier of 1.2000 would carry larger bullish implications for the EUR/USD.
In the event of a firm breach of the 1.1390 support level, it would suggest that the upswing from 1.0176 has been completed, potentially leading to deeper declines towards the 55-week EMA, currently positioned at 1.1231.
Looking at long-term trends, the 38.2% retracement level between the high of 1.6039 in 2008 and the low of 0.9534 at 1.2019 closely aligns with the psychological 1.2000 threshold. A rejection at this point would indicate a continued multi-decade downtrend from that 2008 high, maintaining a neutral outlook for the currency pair. However, a decisive upward breach of the 1.2000/1.2019 levels would suggest a long-term bullish trend reversal, with a potential target of the 61.8% retracement level at 1.3554.
