Recovery Faces Challenge Ahead of Key ResistanceEUR/USD is currently trading around 1.0567 on the 4-hour chart, marking a solid recovery after breaking above the 34-EMA at 1.0550. However, the current rally is facing a key resistance zone at 1.0570–1.0600, where investors will wait for clearer signals before pushing higher. The immediate support is at the 34-EMA at 1.0550, which if broken could see a retest of 1.0520, weakening the short-term uptrend. Conversely, if the price breaks above the 1.0600 resistance zone, the next target would be 1.0650, opening the door for a stronger uptrend.
The fundamentals are now shaping the EUR/USD move. The recovery of the Euro was supported by the temporary weakness of the USD after the comments of the Fed Chairman Jerome Powell, indicating caution in adjusting interest rate policy. However, weak economic data from the Euro area, along with pressure from the US monetary policy, are still factors that restrain the Euro's rise.
In the short term, I predict that EUR/USD will continue to fluctuate in the range of 1.0550–1.0600. A break of the resistance at 1.0600 will be a positive signal for the price to move towards the 1.0650 area or higher. Conversely, if the price falls below 1.0550, selling pressure will increase, pushing the price towards the support area at 1.0520.
