The EUR/USD currency pair opened the week on a softer note, pressured by a modest rebound in the US Dollar (USD) fueled by renewed optimism surrounding a potential US-China trade agreement. Despite the early weakness, the pair managed to stay above the 1.1200 threshold, a level it last tested during a one-month low on Thursday. Market participants are now awaiting a joint statement from the US and China for further clarity on the trade deal.
From a technical standpoint, a recent breach below the 100-period Simple Moving Average (SMA) on the 4-hour chart — the first occurrence since early April — has emboldened bearish sentiment. Technical indicators are firmly entrenched in negative territory, and momentum on the daily chart has started to tilt further to the downside, reinforcing a bearish outlook for the pair.
Still, spot prices are exhibiting some stability just beneath the psychologically significant 1.1200 level. This area now aligns with the 200-period SMA on the 4-hour chart. A decisive break below this support would likely confirm the prevailing bearish bias and expose the pair to additional losses, potentially targeting the 1.1130–1.1125 zone and possibly extending toward the 1.1110–1.1100 range.
Conversely, resistance is seen around the 1.1250 level. A sustained move above this threshold could open the door for a recovery toward the 1.1300 handle. However, any further upside is expected to encounter selling pressure near the 100-period SMA on the 4-hour chart, currently positioned around the 1.1350–1.1355 region. A firm break above this level would be required to invalidate the current bearish narrative and shift sentiment toward a more bullish stance.
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