EUR/USD on Thursday found stability at 1.1792 following a significant drop the previous day. The US dollar received backing from robust macroeconomic data and unanticipated firm signals from the Federal Reserve. The minutes from the last meeting indicate that there are still differing opinions within the Federal Reserve concerning the future trajectory of interest rates. This indicates that the new chair might face challenges in executing a rate cut. Certain members had earlier acknowledged the potential for a rate increase should inflation stay above the target level. The market has modestly adjusted its expectations for policy easing this year, yet it continues to incorporate two 25-basis-point cuts prior to year-end.
The dollar received further backing from the industrial production data. The growth rate reached its peak in nearly a year. Orders for core capital goods surpassed expectations, while the volume of new home mortgages climbed to a five-month peak. Upcoming PMI indices and GDP data are expected to offer further insights into the trajectory of interest rates. On the H4 chart, EUR/USD remains near the 1.1790–1.1800 range following a breach of support at 1.1885, which has intensified the downward movement. The price has stabilized beneath the midline of the Bollinger Bands; the widening of the bands suggests a prevailing bearish momentum. The MACD remains in negative territory, with the histogram continuing to deepen, which reinforces the downward momentum. The Stochastic oscillator has shown a recovery from oversold conditions. In light of this context, a minor correction may occur; however, the underlying structure continues to exhibit weakness. The closest support level stands at 1.1765, while the resistance level is identified at 1.1885.
On the lower H1 time frame, a pronounced decline is evident, succeeded by a period of local stabilization. The price is exhibiting a minor rebound from 1.1780, yet it continues to stay beneath the central line of the Bollinger Bands. The MACD continues to show a negative trend, yet the intensity of this pressure is slowly diminishing. The Stochastic oscillator indicates an overbought condition, implying that any potential corrective rebound may lose momentum around the 1.1820–1.1840 range. The overall analysis indicates a temporary recovery amidst a larger downward trend.
In conclusion, EUR/USD continues to face significant pressure due to hawkish signals from the Fed and strong US economic data. The technical breakdown below key support has confirmed a bearish shift, with momentum indicators suggesting additional downside potential despite oversold conditions. The ongoing stabilization seems to be corrective instead of indicative of a reversal, with any potential bounce probably limited around the 1.1820–1.1840 range. The forthcoming US PMI and GDP announcements are poised to influence the short-term trajectory. A decline beneath 1.1765 would pave the way for further declines towards 1.1700, whereas a consistent advance above 1.1885 is required to ease the bearish sentiment.