EUR/USD Price Forms Double Top at 1.1620 Amid Ceasefire Risk, Eyes Fib Pullback
EUR/USD surged to 1.1620 this morning as Trump declared a “complete and total ceasefire” between Israel and Iran.
Quick overview
- EUR/USD rose to 1.1620 after Trump announced a ceasefire between Israel and Iran, but optimism quickly faded due to accusations of ceasefire violations by Israeli officials.
- The market remains cautious as traders await Fed Chair Jerome Powell's testimony, which could influence interest rates and USD volatility.
- Technically, EUR/USD is showing signs of exhaustion near 1.1620, forming a double top pattern, with key support levels at 1.1581 and 1.1530.
- Traders are advised to wait for a breakout above 1.1620 or a pullback into the 1.1537-1.1557 range for better entry opportunities.
EUR/USD surged to 1.1620 this morning as Trump declared a “complete and total ceasefire” between Israel and Iran. But optimism was short lived as Israeli officials accused Iran of violating the terms by launching fresh missiles and the market’s risk appetite took a hit. Tehran denied the accusations but the market is cautious.
This geopolitical back and forth has capped euro gains despite the short term sentiment. DXY fell 1% after the ceasefire news and allowed EUR/USD to rise but traders are still waiting to see what happens.
Adding to the market tension is Fed Chair Jerome Powell’s testimony later today which could impact interest rates and USD volatility.
EUR/USD Technical: Double Top and Fib Confluence
From a technical perspective the euro is showing signs of exhaustion just below 1.1620, forming a double top pattern, a bearish reversal. This level is the June high and rejection here, especially after such a big move up, is significant.
The pair rallied from 1.1454 and cut through key Fib levels:
- 38.2% at 1.1557
- 50% at 1.1537
- 61.8% at 1.1512
Now the pair is consolidating just above the 23.6% Fib at 1.1581. A break below this zone could expose the next Fib supports and signal bearish continuation. But price is supported by the 50-period EMA at 1.1534 which is rising, a bullish sign.
MACD is positive but fading with shrinking histogram bars—meaning slowing up momentum rather than reversal.
EUR/USD Trade: Wait for Breakout or Retest
Aggressive bulls can enter long on a 2-hour close above 1.1620 with strong volume targeting 1.1649 and 1.1706. A conservative stop-loss can be placed below 1.1530 near the 50-EMA.
Or a pullback into the 1.1537-1.1557 range with a bullish reversal candle (e.g. hammer, bullish engulfing) could be a better entry with better risk-reward.
Key Levels to Watch:
- Levels: 1.1620, 1.1649, 1.1706
- Support: 1.1581, 1.1557, 1.1530
- Risk: Powell’s testimony & ceasefire
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