EURUSD surges back above 1.1700, but look for a pullback

EUR/USD broke above the 1.1700 mark, reaching a fresh five-week high of 1.1715, supported by the continued decline of the US dollar. However, the pair began to stall after hitting the resistance level at 1.1700. Despite maintaining a bullish market structure, momentum appears to be weakening, suggesting traders should exercise caution, as a sharp correction cannot be ruled out.

During the Asian session on Wednesday, EUR/USD gained strong bullish momentum following news of a US-Iran ceasefire, signaling potential high volatility for the remainder of the week. The United States and Iran agreed to a two-week ceasefire, which includes reopening the Strait of Hormuz and initiating talks.

Looking ahead, euro movement is expected to remain highly volatile over the next few days as markets stay sensitive to any developments involving Trump or Iran.

What to Focus on Next?

In the second half of the week, euro traders should monitor Thursday’s German Industrial production and Friday’s consumer inflation data from Germany. The Consumer Price Index (CPI) will be particularly important, as it influences the European Central Bank’s rate decisions. Meanwhile, the US dollar’s movement will continue to play a crucial role in determining the EUR/USD direction. Key upcoming US data points include the FOMC meeting minutes, US CPI, core PCE, and jobless claims report.

EURUSD Technical Outlook

From a technical perspective, the hourly chart shows the euro continuing its rebound. However, if the pair fails to settle above the critical 1.1700 level, traders should consider booking profits on long positions. The 1.1700 level is a significant psychological and technical barrier, having acted as both strong support and resistance throughout 2025 and into 2026.

Technically, on the upside, if bullish momentum strengthens, the pair is likely to test the static resistance at 1.1730 first, followed by the 1.1760 to 1.1770 range. On the downside, a break below 1.1600 would signal a resumption of the downtrend.

 

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