Fundamental Outlook
Euro Side – Stability Improving, Momentum Still Limited
The euro continues to benefit from a more balanced macro outlook compared to earlier in the quarter. Persistent inflation expectations and reduced downside pressure have supported the currency, allowing it to recover steadily.
However, the recovery remains cautious. Structural concerns such as weak growth momentum and sensitivity to external risks still limit conviction. As a result, euro strength is progressing in a controlled manner rather than accelerating into a strong bullish phase.
US Side – Dollar Balanced, Still a Risk Catalyst
The US dollar remains fundamentally supported by higher interest rates, but its dominance has softened. Markets are no longer aggressively favoring USD without new catalysts, which has allowed EURUSD to move higher.
At the same time, the dollar remains highly reactive. Any shift toward risk aversion or renewed demand for safety could quickly pressure EURUSD and slow or reverse gains.

Technical Outlook
Trend Structure
EURUSD has clearly moved out of its earlier bearish phase and is now operating within a developing recovery structure. Higher highs and higher lows are forming, suggesting improving technical conditions.
However, the pair is now approaching a critical zone where the recovery must prove strength. This area represents the boundary between a continued climb and a temporary pause.
Key Support Zones
The 1.1720 – 1.1750 area is the first key support this week. Holding above this zone keeps the short term bullish structure intact.
Below that, 1.1600 – 1.1650 serves as the more important medium term support. A move back into this region would suggest that the market is shifting into consolidation rather than continuation.
A sustained break below 1.1600 would weaken the overall bullish outlook.
Key Resistance Zones
On the upside, 1.1850 – 1.1900 is the primary resistance band. This zone has significant historical importance and may attract strong selling pressure.
If price achieves clear acceptance above 1.1900, the recovery could extend toward 1.2000+, marking a meaningful shift in the broader structure.
Momentum Conditions
Momentum remains positive, but signs of slowing are emerging. This suggests that while buyers are still present, the market is becoming more selective and cautious near resistance levels.
This environment favors gradual movement rather than sharp breakouts.

Trading Scenarios
Scenario 1: Consolidation Near Resistance (Base Case)
The most likely scenario is EURUSD trading between 1.1720 and 1.1900, consolidating recent gains while testing the strength of buyers.
In this case, pullbacks remain limited, and upside attempts require multiple tests before gaining traction.

Scenario 2: Bullish Continuation (Moderate Probability)
If EURUSD breaks and holds above 1.1900, the upside move could extend toward 1.2000 – 1.2050.
This would indicate that the recovery has transitioned into a stronger bullish phase.

Scenario 3: Corrective Pullback (Lower Probability)
Failure to hold above 1.1720 would signal weakening momentum and could bring price back toward 1.1620 – 1.1650.
This would represent a consolidation phase rather than a full trend reversal unless deeper follow through occurs.