EUR/USD Analysis 04/12: Trading Higher Ahead (Chart)

EUR/USD Analysis Summary Today

  • Overall Trend: : Bullish bias.
  • Support Levels for EUR/USD Today: 1.1620 – 1.1550 – 1.1480.
  • Resistance Levels for EUR/USD Today: : 1.1720 – 1.1800 – 1.1880

EUR/USD Analysis 04/12: Trading Higher Ahead (Chart)

EUR/USD Trading Signals:

  • Buy EUR/USD from the support level of 1.1590 with a target of 1.1800 and a stop loss at 1.1500.
  • Sell EUR/USD from the resistance level of 1.1800 with a target of 1.1500 and a stop loss at 1.1890

Technical Analysis of EUR/USD Today:

Amid renewed positive momentum, the Euro has maintained a strong performance this week, thanks to supportive yield differentials. Across reliable trading platforms, the EUR/USD exchange rate rose to the 1.1675 resistance yesterday, Wednesday, supported by favorable developments in bond markets. In recent days, bond yields (the interest rate paid on government debt) have risen at a faster pace in the Eurozone than in the United States, which is supportive of Euro trading.

Technically, the EUR/USD’s test of the 1.1675 level grants US Dollar buyers their strongest exchange rate since November 14. After hitting its low of 1.1491 on November 21, the pair has closed higher for seven consecutive days. This rally moves beyond the narrow descending wedge pattern that was evident on the charts since mid-September, when the EUR/USD fell from its 2025 peak of 1.19. We also note a break above the 50-day Exponential Moving Average (EMA) at 1.1605, which aligns with the emerging positive momentum and suggests that the multi-week lows have been reached, making a test of the 1.19 level in early 2026 possible.

Bond Yields and Euro Momentum

Recenlty, we observed a rise in Eurozone bond yields mid-week following a better-than-expected inflation reading, indicating that financial markets are betting on the European Central Bank (ECB) keeping interest rates at their current levels for an extended period. According to economists, if Eurozone inflation does not fall below the ECB’s target in the coming months, as the markets anticipate, then a 10-year swap rate exceeding 3% is not an unrealistic scenario.

As is well known, the 10-year swap rate is a key money market benchmark, reflecting investors’ and traders’ expectations for future interest rates. It also underpins a wide range of products, such as mortgages and corporate lending. Meanwhile, the EUR/USD pair’s gains reflect lowering expectations for US interest rates, as the past seven trading days have been characterized by a cautious repricing of expectations for a US rate cut by the Federal Reserve.

In this regard, the US interest rate market has almost fully priced in a third consecutive 25 basis point rate cut by the Fed this month. This will naturally have a negative impact on the overall performance of the US dollar. Therefore, we expect the Federal Reserve to be more aggressive in cutting interest rates going forward, compared to the European Central Bank’s support for our expectation that the EUR/USD pair will break through the psychological resistance level of 1.2000 in 2026.

Trading Advice:

We still recommend buying EUR/USD from the support area of ​​1.15 and below, but without risk, with a target of 1.18, the most important level for moving towards the psychological resistance of 1.20.

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