Fundamental Outlook
Euro Side – Stability Improving, Confidence Still Fragile
The euro continues to benefit from a perception of reduced downside risk. Expectations that monetary policy conditions in Europe will remain relatively restrictive have helped steady sentiment and discourage aggressive euro selling.
However, confidence remains conditional rather than robust. Structural growth challenges, exposure to external risks, and lingering geopolitical uncertainty continue to limit conviction. As a result, euro strength is developing methodically rather than explosively, with buyers increasingly selective at higher prices.
US Side – Dollar Balanced, Reactive to Sentiment
The US dollar remains fundamentally supported, but its influence has become more reactive than dominant. Earlier yield driven strength has faded into a more balanced posture, allowing EURUSD to remain supported as long as risk sentiment remains stable.
That said, the dollar retains its defensive appeal. Any negative shift in global sentiment or renewed demand for safety could quickly stall euro upside and trigger corrective moves.

Technical Outlook
Trend Structure
EURUSD has clearly transitioned out of its earlier aggressive decline and is now operating within a medium term recovery structure. Higher lows remain intact, and price is holding above former resistance zones, now acting as support.
Nevertheless, the pair has not yet fully escaped its broader corrective framework. The current zone represents the boundary between recovery and trend confirmation, making price action here especially important.
Key Support Zones
The 1.1650 – 1.1680 area is the first key support this week. Holding above this zone keeps the recovery structure intact and signals that buyers are defending recent gains.
Below this region, 1.1550 – 1.1580 marks the more significant medium term support area. A move back into this zone would suggest that the market needs additional time to consolidate before attempting further upside.
A sustained break below 1.1550 would weaken the bullish outlook and reopen downside risk.
Key Resistance Zones
On the upside, 1.1780 – 1.1820 stands as the primary resistance band. This zone aligns with prior distribution from earlier in the year and represents a major technical hurdle.
A decisive break and acceptance above 1.1820 would significantly improve the technical picture and open room toward 1.1900 – 1.1950 in the weeks ahead.
Momentum Conditions
Momentum indicators remain constructive but are no longer accelerating. This points to a market that is healthy but cautious, favoring either gradual continuation or sideways digestion rather than sharp breakouts.

Trading Scenarios
Scenario 1: Consolidation Near Resistance (Base Case)
The most likely outcome this week is EURUSD rotating between 1.1650 and 1.1820, consolidating recent gains while the market assesses follow through potential.
In this scenario, pullbacks remain shallow, and upside attempts struggle to gain immediate traction until either sentiment or volume improves.

Scenario 2: Bullish Continuation (Moderate Probability)
If price establishes sustained acceptance above 1.1820, bullish momentum could resume, targeting 1.1900 – 1.1950.
This scenario requires stable market conditions and continued moderation in dollar demand.

Scenario 3: Corrective Pullback (Lower Probability)
Failure to hold above 1.1650, especially on a weekly closing basis, would suggest the recovery is losing momentum. This could pull price back toward 1.1550 – 1.1580, without necessarily reversing the broader recovery structure.