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>>EUR/USD analysis shows unexpected steadiness around 1.1780 despite intense US dollar pressure

EUR/USD analysis shows unexpected steadiness around 1.1780 despite intense US dollar pressure

crypthub

about 4 hours ago

EUR/USD Technical Stability

The pair trades flat around 1.1780 despite a 0.4% rise in the US Dollar Index. This level coincides with the 50‑day moving average and a strong 1.1750 support zone. Bollinger Bands have narrowed to a two‑week low, indicating unusually low volatility. Traders view the range as a potential prelude to a larger move.

Policy Divergence and Rate Differentials

The Fed remains data‑dependent, pricing a 65% chance of another 25‑bp hike in June, pushing the DXY above 104.5. The ECB stays hawkish but has narrowed the yield gap, with the 2‑year US‑German spread now around 135 bps. Both banks’ balance‑sheet policies differ, the Fed tightening while the ECB pauses reductions. This convergence helps the euro hold its ground.

Positioning and Future Outlook

Large speculators have trimmed short‑USD positions, while commercial hedgers buy euros near 1.1750‑1.1800, reinforcing support. Options activity shows growing interest in upside calls above 1.1850, hinting at breakout expectations. Monitoring 1.1750 support and 1.1830 resistance is key as tight Bollinger Bands suggest an imminent volatility expansion.