The euro edged higher against the U.S. dollar during early European trading on Wednesday, with the EUR/USD pair climbing toward 1.1330. The move reflects broad-based weakness in the greenback as investors respond to fresh concerns over U.S. fiscal health following a credit rating downgrade by Moody’s.
The credit agency lowered the United States’ long-term rating from ‘Aaa’ to ‘Aa1’, citing persistent fiscal deterioration due to rising deficits and mounting interest expenses. The downgrade has reinforced the prevailing “sell America” sentiment in global markets, pushing the U.S. dollar lower across the board.
Technical Landscape Supports Bullish Euro Outlook
From a technical perspective, the EUR/USD pair maintains a bullish tone, comfortably trading above its 100-day Exponential Moving Average (EMA) on the daily chart. The Relative Strength Index (RSI) stands firm at 57.45—above the midline—indicating sustained positive momentum in the near term.
On the upside, immediate resistance is seen at 1.1382, the May 6 high. A confirmed break above this level could trigger a fresh wave of buying interest, with the next target at 1.1455—the upper boundary of the Bollinger Band. If bullish momentum continues, the pair may eventually test 1.1574, the April 21 high, representing a key resistance zone.
On the downside, initial support lies at 1.1211, the low from May 8. A drop below this threshold could expose the pair to deeper losses toward 1.1106, the lower limit of the Bollinger Band. The 100-day EMA at 1.0940 serves as a crucial technical floor and a final line of defense for the bullish outlook.
With sentiment leaning against the dollar and eurozone fundamentals offering support, EUR/USD appears poised to maintain its upward trajectory—barring any significant shift in macroeconomic data or policy signals from the European Central Bank or the U.S. Federal Reserve.
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