EUR/USD heads into the new week caught between a Federal Reserve that is in no hurry to cut and a European Central Bank that has signalled it is close to the end of its easing cycle. That tug-of-war has kept the pair inside a well-defined range, and the range edges are where the trading opportunities are.
What’s driving the pair
- Rate differentials: two-year US–German yield spreads have narrowed, which normally supports the euro.
- US data: Thursday’s CPI print is the week’s main event. A hot core reading would revive the dollar quickly.
- Positioning: speculative euro longs are elevated, which leaves the pair vulnerable to a sharp washout on any hawkish surprise.
Technical picture
On the daily chart price is holding above the 50-day moving average, with the 200-day sloping gently higher underneath. Momentum (RSI 14) is neutral around 55, so there is no overbought signal yet. A daily close above the top of the range would open the way to the year’s highs; failure there keeps the range intact.
Our bias: buy dips toward range support with a stop below the 50-day MA, targeting the range top. We step aside if US CPI comes in two tenths or more above consensus.
Key events this week (SAST)
- Tuesday 11:00: German ZEW economic sentiment
- Thursday 14:30: US CPI (Sep)
- Friday 16:00: University of Michigan sentiment (prelim)