EUR/USD: Cautiously Bullish Above 1.1700 Ahead of FOMC and ECB

Market Overview

The EUR/USD currency pair has transitioned from a bearish outlook to a cautiously bullish stance, primarily supported by its ability to maintain levels above the critical support zone of 1.1700–1.1710. This shift in sentiment comes ahead of significant monetary policy meetings from the Federal Open Market Committee (FOMC) and the European Central Bank (ECB) later in the week.

Current Price Action

After a gap lower over the weekend, EUR/USD has managed to recover and is trading slightly higher. The upcoming FOMC and ECB meetings are expected to increase market volatility, particularly on Wednesday and Thursday. Additionally, any developments regarding US-Iran relations could further influence USD strength and market dynamics.

Technical Analysis

H4 Chart Analysis

On the four-hour chart, the price has reclaimed the 1.1700 psychological level, which previously acted as a resistance. The pair is currently above the 100 and 200-period Simple Moving Averages (MAs), indicating a bullish trend. The Relative Strength Index (RSI) is around 54, suggesting there is still room for upward movement before reaching overbought conditions.

H1 Chart Analysis

Zooming into the one-hour chart, the pair reached a local peak near 1.1754 before pulling back. The price has rejected the 200-MA as dynamic support, and a bullish engulfing candle or a long-wick rejection near the 1.1716-1.1700 area would indicate that buyers are ready to defend the trend.

Tactical Scenarios

Bullish Scenario

For the bullish trend to continue, the 1.1710 - 1.1700 area must be defended. A successful retest of the M15 200-MA followed by a break above 1.1750 would be ideal for entering long positions. Target levels include:

• Target 1: 1.1769 (Recent high)
• Target 2: 1.1800 (Psychological level)

Invalidation of this scenario would occur with a 15-minute candle close below 1.1700.

Bearish Scenario

If the price fails to hold above 1.1700, a breakdown could lead to a deeper correction. Key levels to watch include:

• Target 1: 1.1685 (Value area high)
• Target 2: 1.1643 (April 8 swing low)

Confirmation of a bearish shift would be indicated by the RSI dropping below 50 on the M15 chart.

Key Levels to Watch

Resistance: 1.1769, 1.1800, 1.1867

Support: 1.1700, 1.1680, 1.1643