EUR/USD Technical Analysis: Range-Bound Action Nears Key Support

The EUR/USD currency pair continues to trade within a consolidated sideways range, oscillating between 1.1114 and 1.1269 over the past month. Recent high-impact macroeconomic releases, including US Nonfarm Payrolls, unemployment metrics, and inflation data, triggered temporary price swings but failed to break the market out of this established equilibrium zone. The market appears to have largely priced in the Federal Reserve's hawkish monetary policy path, limiting sustained upside momentum for the US dollar.

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Fundamental conditions present a mixed outlook for the pair. European Union inflation recently accelerated to 4.0%, reinforcing expectations for further European Central Bank (ECB) rate hikes, including a projected third increase in December. Meanwhile, US political dynamics following recent elections have resulted in a divided Congress, which could delay major fiscal policy decisions. Although strong US economic data supports ongoing Fed tightening, market pricing is increasingly balancing these factors against anticipated ECB policy actions.

Smart Money & Technical Structure

From a technical perspective, the pair remains constrained within its horizontal channel. A recent liquidity sweep above the 1.1270 level, combined with firm US labor and inflation figures, renewed short-term bearish pressure. Key technical resistance remains anchored around Imbalance 24, which continues to hold valid. Buyers need to invalidate this imbalance zone and establish clear bullish market structures before any meaningful upward trend can resume.

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Bulls are currently monitoring key support levels near the lower boundary of the range to sweep sell-side liquidity. Primary downside reference points include the recent low at 1.1105 and the major structural low at 1.1066 recorded in June of last year. While the broader multi-year macro structure retains bullish potential, price action within the current horizontal range remains neutral until a decisive breakout occurs.

Economic Calendar Highlights

Market participants are turning their attention to upcoming economic events for potential near-term catalysts. Key scheduled releases include:

• United States: Initial Jobless Claims (13:30 UTC)
• United States: Existing Home Sales (15:00 UTC)
• European Union: Speech by ECB President Christine Lagarde (19:30 UTC)

While impact from the scheduled US data releases is expected to be limited, ECB President Lagarde's address represents the primary event to watch for potential shifts in euro sentiment and central bank guidance.

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