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GBP/USD Falls Amid Strong U.S. Data and Fed Rate ExpectationsDetach

EUR/USD – Bulls Attempt Defense, But Bearish Red Flags Persist

 

EUR/USD staged a modest recovery into the weekend, climbing to 1.1704 after U.S. August PCE data landed in line with expectations. The relief bounce was aided by a pullback in U.S. yields, softer dollar tone, and rallies in gold and equities. The pair settled near 1.1695, up around +0.25% on the day.

Market Drivers

  • Dollar Dynamics: USD/CNH eased toward 7.1400, lifting risk sentiment.
  • Macro Influence: PCE inflation aligned with estimates, offering no fresh hawkish trigger for U.S. yields.
  • Flows: Risk-on appetite and broad U.S. dollar selling allowed euro bulls to regain some ground.

Technical Landscape

  • Bearish Overhang: The monthly candle shows a long upper wick (from the 1.1918 September high), signaling rejection at elevated levels.
  • Momentum: EUR/USD trades below its 10- and 21-day DMAs, while the daily RSI trends lower, pointing to weakening short-term momentum.
  • Support Levels:
    • 1.1659–1.1660 (recent base).
    • 1.1606 (Sept low).
    • 1.1400 (major psychological pivot).
  • Resistance Levels:
    • 1.1727/1.1730 (recent breakdown zone).
    • 1.1780 (trendline/near-term cap).
    • 1.1836–1.1919 (upper Bollinger and recent highs).

Outlook

While bulls managed to hold above the 55-DMA and RSI avoided oversold territory, the larger technical setup leans bearish. If data next week (PMIs, JOLTS, ADP, NFP) reinforce U.S. strength, EUR/USD risks slipping through trendline support toward 1.1606 and even 1.1400. Bulls must reclaim the 1.1780–1.1830 zone to neutralize pressure.