EUR/USD price holds fragile support as dollar steadies after Fed cut

Traders Union
All News
Financial News
Euro holds fragile support

Highlights

- EUR/USD consolidates near 1.177 as the dollar strengthens after Fed’s cautious cut.

- Key support sits at 1.173–1.17, while resistance remains firm at 1.18.

- German PPI data could provide euro support, but upside remains limited in near term.

The EUR/USD pair has struggled to build momentum above 1.1800, a resistance level repeatedly tested in recent weeks. On the four-hour chart, price action is consolidating near the 20- and 50-period EMAs, while the 100-EMA at 1.1735 and the 200-EMA at 1.1697 form a layered support cluster alongside the rising trendline from August.

EUR/USD price dynamics (Source: TradingView)

The RSI has slipped toward 44, reflecting waning bullish momentum after a failed breakout above 1.1900 last week. Fibonacci retracements mark 1.1769 as a pivot; losing this level risks deeper losses toward 1.1635. Conversely, a confirmed close above 1.1800 would shift focus back to 1.185 and potentially 1.19, restoring the bullish case.

Fed signals caution as dollar regains strength

The Federal Reserve cut rates by 25 basis points but emphasized patience in its path forward. Chair Jerome Powell described the move as a “risk management” step and stressed a meeting-by-meeting approach, signaling reluctance to accelerate easing despite market hopes for faster cuts. That tone, combined with stronger-than-expected U.S. jobless claims data at 231,000, has reinforced confidence in the greenback and tempered speculative bets against the dollar.

While looser policy typically pressures the dollar, Powell’s caution has limited the euro’s ability to capitalize, leaving the pair range-bound in the short term.

ECB holds steady as investors watch German data

On the European side, ECB policymakers have emphasized restraint, suggesting little appetite for further cuts amid lingering inflation concerns. Vice President Luis de Guindos and other Governing Council members recently highlighted the need for prudence, reinforcing expectations that the easing cycle is coming to an end.

Upcoming German producer price index data may prove pivotal for sentiment. A stronger print would provide the euro with fresh support near 1.173–1.17, but the repeated failure to clear 1.1800 underscores how fragile bullish momentum remains.

In earlier commentary, we highlighted that the euro’s resilience rested on the 1.173–1.17 zone acting as a defensive floor. This week’s trading confirms that support remains intact, but the inability to sustain gains above 1.1800 leaves EUR/USD vulnerable. The next sessions will likely determine whether the pair establishes a base for recovery or extends its retreat toward the mid-1.1600s.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.