EUR/USD stages a sharp recovery from multi-month lows. Can the bounce hold? These are the key levels to watch

EUR/USD has staged a sharp recovery from its lowest levels since mid-2025, bouncing off a key support zone as ceasefire diplomacy between the US and Iran eases pressure on the dollar. The pair has reclaimed ground quickly, but now faces a critical test at a major resistance confluence. Whether bulls can push through will likely depend on how the geopolitical picture develops in the coming days.

In our previous EUR/USD analysis, we covered the pair testing key support following the FOMC surprise. Since then, price reached the 1.14 range lows before staging the recovery we are seeing today.

Daily chart analysis

EUR/USD is testing the 200 SMA and range equilibrium at 1.1650 from below, with the 1.14 range lows providing the key support floor.

EUR/USD remains under pressure on the daily timeframe following a break below the 200 SMA at the start of March. While the pair is trading within a broader high-timeframe range, the medium-term structure is showing signs of weakness, with a series of lower highs and lower lows forming over recent weeks.

The primary trend context is important here. Price is not in a clear bull or bear market but in a range-bound environment, oscillating between the 1.14 range lows and the 1.19–1.20 range highs. However, the failure to break above the range highs in January, followed by a swift rejection and the subsequent loss of the 200 SMA, suggests sellers are beginning to assert some control over the medium-term structure.

The key level to watch on the upside is the range equilibrium at 1.1650, which also aligns with the 200 SMA. The 200 SMA has acted as a significant reference point on multiple occasions over the past year, and price is currently testing this area from below. A reclaim of 1.1650 on strong volume and sustained buying pressure would open the door for another test of the range highs around 1.19. Without that, the path of least resistance remains to the downside.

On the downside, the immediate floor is the 1.14 range lows support zone. A confirmed break below this level could be a significant development, and could open the way towards the deeper support area at 1.11–1.12, where price previously consolidated before the broader rally began.

Key levels to watch:

• 1.1650 — range equilibrium and 200 SMA resistance
• 1.19 — range highs
• 1.14 — range lows support
• 1.11–1.12 — deeper support if range lows break

4-hour chart analysis

A structure of higher highs and higher lows has formed since the 1.14 bounce, but MACD histogram divergence warns that bullish momentum may be fading ahead of the 1.1650 resistance zone.

The short-term picture is more constructive. EUR/USD has been building a structure of higher highs and higher lows on the 4-hour chart since bouncing from the 1.14 range lows, and price has reclaimed both the 20 and 50 EMA. The 20 EMA has also crossed above the 50 EMA for the first time during this sell-off, a development that typically signals a shift in short-term momentum in favour of buyers.

The immediate resistance to watch is the 1.1650 zone, which aligns with both the local structure highs and the high-timeframe range equilibrium identified on the daily chart. A confirmed break above this level could open the door for further upside continuation.

However, there is a notable warning sign. The MACD histogram is showing bearish divergence with price: while EUR/USD has been printing higher highs, the histogram is producing lower highs. This suggests momentum may be fading even as price grinds higher, and warrants caution for bulls approaching resistance.

Key levels to watch on the 4-hour:

• 1.1650 — local resistance and range equilibrium; a break above could open the door for further upside
• 1.1550 — key support and current 20/50 EMA confluence; a break below could signal a breakdown of the local uptrend and could see price target 1.14 once more

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