This week, the Euro to US Dollar (EUR/USD) has made a strong rebound at the important psychological level of 1.1600, indicating that the market may be brewing a new trend shift. This rebound not only confirms the support effectiveness of this level but also lays the groundwork for subsequent movements—current prices are approaching the resistance level formed by the nine-day Exponential Moving Average (EMA), located around 1.1675, becoming the core focus of short-term bull-bear battles.
From a technical perspective, 1.1600 has been a key pivot point for many years, having served as support during the pandemic in 2020, resisting the strong dollar impact in 2022, and once again becoming a pivot for bull-bear transitions in 2024. The price stabilizing and rebounding at this position reflects that institutional investors still regard it as an important reference point for Euro valuation.
Technical indicators are also sending positive signals: the Relative Strength Index (RSI) has rebounded from the oversold zone (below 30) to around 45, indicating a gradual recovery of momentum; trading volume has significantly increased during the rebound, suggesting that buying is not merely short-term short covering but rather real capital involvement; a clear bullish engulfing pattern has appeared on the four-hour chart, further strengthening the reversal expectations.
The main obstacle in the current market comes from the nine-day EMA. As a dynamic reference for short-term trends, this moving average consolidates the closing prices of the past nine trading days and is a key signal source for algorithmic trading and institutional traders. Historical data shows that prices have repeatedly encountered resistance and retraced at this level, forming effective pressure. Additionally, order book data indicates that a large number of sell orders are concentrated in the 1.1675 area, and market makers report that institutional selling pressure is rising, while retail long positions have significantly increased due to rebound sentiment, creating a typical “retail trap” risk in the market.
If EUR/USD can break through the nine-day EMA with volume and hold above it, it may open up upward space, targeting around 1.1750; conversely, if it fails to break through and experiences a pullback, it may retest the 1.1600 support, or even dip lower. Short-term operations need to closely monitor the effectiveness of the breakout of this moving average and the accompanying volume situation.