EUR/USD searches for a new balance: traders scrutinize the behavior around the 100-day Moving Average and the critical level of 1.1665

The Downward Pressure Continues to Characterize the Currency Pair

During Monday’s Asian trading session, EUR/USD reached 1.1670, marking the lowest in the past twenty-eight days following a second consecutive wave of selling. The current dynamics reflect a context where bears are carefully assessing the possibility of a decisive break below the 100-day Simple Moving Average, positioned around 1.1665. Such a move could trigger a broader correction compared to the peak reached on December 24, when the pair hit 1.1800.

Geopolitical Factors and Monetary Dynamics: The Outlook Supporting the USD

The increasingly complex geopolitical environment has fueled renewed demand for safe haven assets in the US Dollar, allowing it to recover from early October lows. This trend has added further pressure on the EUR/USD pair. Meanwhile, two dynamics remain at play that could limit further appreciation of the US currency: the possible maintenance of an accommodative stance by the Federal Reserve and growing confidence that the European Central Bank has concluded its tightening cycle. These factors could provide a support base for the euro.

Technical Analysis: What Do the Indicators Reveal

The daily timeframe scenario shows a consolidated bearish setup. The MACD indicator has crossed below its Signal line and remains in negative territory, with an expanding histogram suggesting strengthening downward momentum. The RSI, at 44, is significantly below the equilibrium level of 50, indicating a weakening of bullish pressure.

The primary support level coincides with the 100-day Simple Moving Average, set around 1.1665. As long as EUR/USD remains above this threshold, the pair may have a “cushion” to prevent further deterioration. The 100-day Moving Average, gradually rising, thus maintains a constructive role from a broader market structure perspective. A daily close below this level would shift the technical balance in favor of sellers.

What Would Be Needed for a Trend Reversal

For the downward momentum to weaken and for bullish momentum to regain strength, specific movements are necessary: a sustained stabilization above the 100-day SMA accompanied by a rise in RSI above 50, as well as a MACD breakout above the Signal line and a return to positive territory. Until these signals materialize, the context will remain bearish.

Technical analysis was conducted with the support of artificial intelligence tools.

EUR/USD chart analysis on the daily timeframe