*EUR/USD trades with a slight upward bias in the near term, boosted by improved consumer confidence in the euro area and supportive political rhetoric.
*Nagel’s “strong and sovereign Europe” push gives the euro a positive structural narrative, especially if reforms and fiscal discipline follow.
*But hawkish US Fed tone and risk of euro over-appreciation (hurting trade and inflation) limit sustained gains.
The euro held firm on Monday, consolidating with a slight upward bias as improved consumer sentiment in the bloc and supportive rhetoric from policymakers underpinned demand. The flash estimate for euro-area consumer confidence in September came in at –14.9, a modest improvement from –15.5 and slightly better than consensus expectations. While sentiment remains deeply negative by historical standards, the small surprise offered relief at a time when growth momentum across the eurozone is fragile.
Policymakers also added a layer of optimism. Bundesbank President Joachim Nagel urged deeper financial integration and sounder fiscal management as “building blocks for a strong and sovereign Europe,” stressing that a stronger international role for the euro should not be feared. His remarks downplayed concerns that appreciation would erode export competitiveness, instead framing euro strength as a strategic necessity. The comments provided a narrative tailwind for the common currency, even as traders remain mindful of underlying growth headwinds.
Across the Atlantic, hawkish tones from the Federal Reserve continue to cap euro gains. Several Fed officials signaled that rate cuts may be slower than markets anticipate, keeping the U.S. dollar supported despite a pullback in recent sessions. This policy divergence remains the key drag on sustained upside for EUR/USD, particularly if U.S. data surprises on the stronger side.
In the near term, the euro is likely to remain range-bound, with 1.1750 providing support and 1.1800 as the immediate resistance to watch. Broader risks still skew to the downside, given Europe’s sluggish growth backdrop, fiscal uncertainties, and potential export pressures should the euro rise too quickly. Traders will look to upcoming U.S. inflation readings and ECB communications for the next directional catalyst.
EURUSD, H4:
EURUSD has rebounded after finding support at 1.1770, regaining momentum and pushing back toward 1.1806. The broader structure remains constructive as long as price holds above the rising trendline near 1.1690. A sustained break above 1.1806 would open the way toward 1.1900, while failure to hold above 1.1770 risks a deeper pullback toward 1.1690 and potentially 1.1585.
Momentum indicators are turning supportive. RSI has climbed to 57, recovering from earlier weakness and pointing to strengthening bullish momentum. Meanwhile, MACD is attempting a bullish crossover at the zero line, signaling that upside momentum may be re-emerging.
Overall, EURUSD is consolidating with a bullish bias, with buyers needing a firm push above 1.1806 to confirm upside continuation, while a drop under 1.1770 would undermine the recovery and tilt bias back toward the downside.
Resistance level: 1.1860, 1.1900
Support level: 1.1690, 1.1585
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