has been unable to break past the resistance at 1.0950 despite two attempts in the past 10 days. These failed attempts have led to the formation of a possible double-top pattern, which would indicate the bias could have turned bearish, even though the pullback seems more of a technical correction than a change in trend as of now.
EUR/USD Daily Chart
Past performance is not a reliable indicator of future results.
For the double-top pattern to be confirmed, EUR/USD would need to break below the neckline support at 1.0820. So far, this level has held firm, even amid the recent bearish momentum. If EUR/USD tests this support and rebounds, it would invalidate the double-top formation and suggest that the correction is temporary, with the broader bullish bias still intact.
In that scenario, buyers would likely target another retest of the 1.0950 resistance level, seeking a decisive breakout toward the psychological 1.10 mark.
Fundamental Backdrop
On the fundamental side, the US dollar has been attempting to stabilize following several weeks of significant declines. Last Wednesday’s FOMC meeting reaffirmed Federal Reserve Chair Jerome Powell’s “slow but steady” approach to monetary policy. Despite recent inflationary pressures, largely tied to Trump’s proposed tariffs, the Fed maintained its forward guidance for two rate cuts in 2025.
Powell emphasized the importance of long-term economic stability, choosing to look beyond short-term inflation fluctuations. His measured tone, paired with an acknowledgment of ongoing economic and policy uncertainty, appeared to reassure investors about the Fed’s commitment to maintaining a balanced stance.
While the absence of urgency in cutting rates has helped the dollar find support, the unchanged guidance—despite higher inflation projections—could limit its upward momentum. As of now, the faces firm resistance around 103.75.
Conclusion
Although EUR/USD shows signs of a possible double top, the prevailing market sentiment suggests the pullback may still be a healthy technical correction. A break below 1.0820 would signal a bearish reversal, while a rebound could renew bullish momentum and prompt another test of key resistance at 1.0950.
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