The EUR/USD pair starts the week weaker due to a modest US Dollar increase supported by optimism over a US-China trade deal. Despite this, prices remain above the 1.1200 mark, as traders await further details from the US-China joint statement.

A recent decline below the 100-period SMA on the 4-hour chart signals potential bearish movement. Oscillators are in bearish territory and gaining negative traction on the daily chart, indicating a downward path for the EUR/USD pair.

Resilience Below 1.1200 Level

Prices show resilience below the 1.1200 level, which coincides with the 200-period SMA on the 4-hour chart. A decisive break here could lead the pair towards the 1.1110-1.1100 area, with intermediate support near the 1.1130-1.1125 region.

The 1.1250 zone presents an immediate hurdle for EUR/USD. Reclaiming the 1.1300 level could face resistance near the 100-period SMA on the 4-hour chart, around the 1.1350-1.1355 range, acting as a pivotal point for the Euro’s trajectory.

The Euro is the currency for Eurozone countries and is the second most traded currency worldwide. The European Central Bank manages monetary policy and interest rates, which affects the Euro’s value.

What we’re seeing in the EUR/USD pair is a mild softening, which has been driven by an uptick in the Dollar – itself buoyed by constructive developments in trade talks between Washington and Beijing. Even so, the pair has managed to hold steady just above the 1.1200 zone, a level that’s been tested before but hasn’t given way yet. Traders are evidently taking a cautious approach, waiting for more clarity in the form of official communication from the people involved in the negotiations.

Technical Analysis

Now, turning to technicals. The retreat beneath the 100-period simple moving average on the four-hour chart isn’t encouraging. It suggests that any bullish momentum we had has faltered, and there’s some downside pressure building. When we look at the oscillators – those momentum indicators on the daily time frame – they’re painting a bearish picture. They’ve not only crossed below neutral levels but are also sliding further into negative territory. This tends to happen before the price picks up speed in the same direction, and in this case, that direction appears to be lower.

Support appears to be forming near the 1.1130 to 1.1125 zone – that’s just above the 1.1110 region, and traders will likely be watching those levels to see whether a floor forms or if price slices through, triggering another wave of selling. What adds weight to this area is its alignment with prior lows – it’s acted as a buffer before, and if it breaks now, expect some acceleration to the downside.

That said, resilience near current levels should not be dismissed lightly. The price has repeatedly shown an ability to hold above the 200-period SMA on the same four-hour chart, tucked just under the 1.1200 figure. It could indicate consolidation rather than a breakdown, but it’s not a level to assume will hold without backup from improving sentiment or a shift in fundamentals.

On the other side of the equation, attempts to reclaim lost ground will likely meet headwinds near 1.1250. Beyond that, the next technical hurdle is positioned in the 1.1350 to 1.1355 zone, guarded closely by the 100-period SMA, which has started acting more like a ceiling than a support line. A decisive close above that area would likely see a rethink in positioning, signalling a pause – if not a reversal – in the downward trajectory we’ve been watching recently.

The Euro, naturally, is heavily influenced by policy settings across the Euro Area, particularly those set in Frankfurt. The policy environment hasn’t shifted dramatically, but with growth concerns still present, the stance remains conservative. That monetary outlook, when compared with its overseas counterpart, sways interest differentials in favour of the Dollar, adding further context to why the pair is behaving the way it is.

Traders dealing in interest rate-sensitive assets will likely want to monitor this region closely. Price stability at current levels will matter more in the coming sessions, particularly if sentiment around trade developments starts to cool or surprise. For now, the weight lies slightly on the downside, but that can shift swiftly if external factors move.

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