EUR/USD consolidates and looks for bullish signals above 1.1735 to extend the upward movement

Fundamentals Supporting a Higher Currency Pair Movement

The EUR/USD pair continued to rise on Tuesday, supported by the weakness of the US dollar. The dollar declined for the second consecutive day and failed to maintain the highs tested on Monday since December 10, amid decreasing expectations that the Federal Reserve (Fed) might pause its interest rate hikes.

The euro (EUR) benefited from expectations that the European Central Bank (ECB) will not cut interest rates further in the near future. This situation has kept the EUR/USD exchange rate in a favorable position for an upward move.

Current Price and Technical Turning Points

The current spot price is trading at 1.1735, up 0.10% during today’s trading session. This level is a key confluence point, as it coincides with the 100-hour moving average and the 50% Fibonacci retracement level of the decline from 1.1808 to 1.1660.

The rebound from the low around 1.1660 (the lowest level in nearly four weeks) demonstrates the buying power entering around 1.1710 during the Asian session, driven by new buyers.

Technical Signals Point to a Positive Direction

The MACD (Moving Average Convergence Divergence) indicator has turned positive and shows upward momentum. This indicates a bullish momentum developing during the day. The Relative Strength Index (RSI) is at 59, suggesting there is still room for further upward expansion.

The fact that the price can hold above the 1.1735 level consistently is a positive sign for further bullish expansion. The next Fibonacci retracement level to watch is 61.8%, around 1.17s half.

Outlook on Future Movement

If the price can break through the aforementioned resistance levels, a breakout would reinforce buyer confidence and confirm the possibility of a strong upward trend.

However, if the price fails to break through this area, EUR/USD may enter a consolidation phase within the current range. This scenario requires close monitoring.