VT 
EUR/USD is attempting a short-term recovery, with RSI indicators moving higher after recent declines. However, the medium-term structure has turned bearish, and rallies into resistance are expected to attract renewed selling interest. Bespoke resistance around 1.1555 to 1.1575 defines the preferred sell zone, aligning with the broader downside bias.
Fiscal Policy Updates from ECB and Fed
Recent updates from the European Central Bank (ECB) highlight a cautious fiscal stance, with policymakers stressing the need for budget discipline amid fragile growth. While inflation is easing closer to target, the ECB has avoided signaling fresh stimulus, wary of rising debt burdens across member states. This restraint has limited euro upside, keeping the currency vulnerable to renewed selling.
In the U.S., the latest minutes from the Federal Reserve reinforced patience, with officials emphasising that rate cuts will only be considered once inflation shows sustained progress toward target. Fiscal debates in Washington remain contentious, with deficit concerns curbing appetite for expansive spending. Together, these dynamics have kept the dollar supported, reinforcing downside pressure on EUR/USD.
EUR/USD Technical Analysis
- Resistance : 1.1555 to1.1575 as a preferred sell-entry area. However, a sustained move above 1.1575 would negate bearish bias
- Support: 1.1475 as initial downside target and 1.1455 as deeper bearish extension
- Bearish bias: Sell rallies into with 1.1555 as resistance, aiming for 1.1475 and 1.1455. Place a stop loss above 1.1575.
- Bullish setup: Long only if price breaks and holds above 1.1575. Target corrective continuation higher.
- Range play: Trade between 1.1455 and 1.1555. Sell near resistance, cover near support.
Outlook: Bearish Bias Prevails for Now
The corrective bounce of EUR/USD is expected to stall near resistance, where sellers are likely to re-engage. Fiscal caution from the ECB and the patient stance on rate cuts from the Fed reinforce the bearish bias, keeping the euro vulnerable to renewed downside. A sustained break below 1.1475 would confirm continuation of the bearish extension, while only a move above 1.1575 would invalidate the setup.
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