The EUR/USD pair continues to climb higher, building on its recent bounce from multi-week lows as the US Dollar weakens. Speculations of a larger rate cut by the Federal Reserve, coupled with a positive risk sentiment, are putting pressure on the Greenback and fueling the bullish momentum for the Euro.
Following a softer-than-expected US Producer Price Index report, investors are betting on a more aggressive interest rate cut by the Fed in the upcoming week. This, combined with the European Central Bank’s reluctance to provide specific interest rate guidance, is boosting the Euro and driving the EUR/USD pair higher.
Technically, the pair is trading near the top of a descending trend channel, signaling a potential reversal in the recent downtrend. A break above the channel could lead to further gains towards the 1.1155 resistance level, with the ultimate target being the 1.1200 mark. On the downside, immediate support lies at 1.1065-1.1060, followed by the key 1.1000 level and the trend-channel support at 1.0975.
Overall, the EUR/USD pair is poised for further upside if it can break through the descending channel, with potential resistance levels at 1.1155 and 1.1200. However, a failure to break above the channel could result in a retest of support levels at 1.1065, 1.1000, and 1.0975.
EUR/USD 4-hour chart
