17 Feb 2025

EUR/USD maintains the strong gains achieved last week, reaching a nearly three-week peak. The current technical configuration is advantageous for bullish traders, indicating potential for further increases. A decline below the 1.0465 support level could lead to more significant losses.

The EUR/USD pair is currently facing challenges in fully leveraging the gains made over the past four days, fluctuating within a limited range just beneath the 1.0500 psychological threshold during the Asian trading session on Monday. Nevertheless, the spot prices remain near the nearly three-week high reached on Friday, supported by a weaker US Dollar (USD).

From a technical standpoint, sustaining levels above the 38.2% Fibonacci retracement of the November-January decline, along with positive indicators on the daily chart, favors bullish sentiment. Consequently, there is a strong likelihood of an upward movement towards the 1.0545-1.0555 zone, which includes the 50% retracement level and the 100-day Exponential Moving Average (EMA).

MORE VIEW

1. Long-Term Context

• 2015–2017 Range: After a sharp drop in late 2014–early 2015, EUR/USD largely traded between about 1.05 and 1.15.
• 2018–2020 Downtrend: The pair peaked near 1.25 (early 2018), then trended lower to around 1.06 (2020).
• 2020–2021 Recovery: Bounced from COVID lows around 1.06 to highs near 1.22–1.23 in 2021.
• 2022 Decline: Fell from ~1.22 down to around 0.95, briefly going below parity.
• 2023 Rebound: Rallied off the lows near 0.95 to about 1.10–1.11, then pulled back slightly.

Given that multi-year context, EUR/USD has tested both sides of parity in the last decade and remains in a larger sideways-to-downward range when viewed on a long-term basis.

2. Key Support Levels

1. 1.05–1.06 Region

   • This is a well-watched support zone. It coincides with prior swing lows in early 2023 and historically acted as support/resistance in 2015–2017.
   • If price closes decisively below 1.05, the next level to watch may be around 1.03 or even parity (1.00).

2. Parity (1.00)

   • Psychologically important level.
   • EUR/USD dipped below 1.00 in 2022, so if the pair weakens again, this area could be tested.

3. 0.95

   • The 2022 low. A break here would be significant and would represent new multi-year lows.

3. Key Resistance Levels / Possible Targets

1. 1.10–1.11

   • The pair briefly stalled in this region in 2023. A close above 1.11 would suggest bullish continuation in the short to medium term.

2. 1.12–1.15 Zone

   • A cluster of past resistance levels sits around here (seen in 2019 and 2020). It could be the next target if EUR/USD gains momentum above 1.11.

3. 1.20+

   • This region was tested in late 2020–2021. If EUR/USD eventually breaks above the mid-1.10s, 1.20+ becomes a longer-term bullish objective.

4. Technical Observations

• Moving Averages: (Not visible here, but generally) the longer-term MAs on weekly charts can help confirm if the pair is shifting into a sustained uptrend or downtrend.
• Trendline Check: From the 2018 peak near 1.25 through the 2022 lows around 0.95, the pair remains below the longer-term downward trend line (though it’s tried to break out in 2023).
• Consolidation Zones: EUR/USD spent a good portion of 2015–2020 oscillating roughly between 1.05 and 1.15. Price returning to that zone now suggests we’re at a pivotal area.

5. Summary

• Immediate Support: ~1.05–1.06
• Next Lower Support: 1.03 and then parity (1.00)
• Immediate Resistance: ~1.10–1.11
• Higher Resistance Targets: ~1.12–1.15 and beyond to 1.20

A break below 1.05–1.06 could open the door to a retest of parity (1.00), while a sustained push above 1.10–1.11 might target the mid-1.10s or even 1.20 in a more bullish scenario. As always, fundamental factors (e.g., interest rate differentials, ECB/Fed policy, global risk sentiment) play a large role in currency moves, so keep an eye on economic news and central bank announcements.