Explore Companies BySectors & Categories
Explore Companies ByUse Cases
Explore Companies ByProducts & Services
Explore Companies ByRankings & Reviews
Featured NewsCompaniesMarketsCryptoTechRegulatoryCommentaryUKUSWorldMore

    Latest Wires

      Daily Newsletter

      LF Daily News

      Daily industry focused newsletter giving you an overview for the financial & finTech industry.

      See All Newsletters
      By clicking "Sign Up" you are agreeing to our Terms of Service and Privacy Policy

      EUR/USD at Make-or-Break Levels – 38.2% Fib Test and Overvaluation Signals a Key Turning Point

      Published: just now

      EUR/USD at Make-or-Break Levels – 38.2% Fib Test and Overvaluation Signals a Key Turning Point

      Fundamentals – The Euro's Shaky Ground

      EUR/USD Briefly Breaks 1.1200 – Why the Drop Matters

      In early trading today, EUR/USD slipped just below the 1.1200 support level, signaling a test of critical psychological and technical thresholds. While the pair has pulled back around 3% from its April 21 peak, it's still trading about 3% overvalued according to short-term fair value models. This mispricing becomes even more apparent when juxtaposed against the two-year EUR/USD swap spread, currently sitting at -170 basis points—a differential historically consistent with prices closer to 1.0600.

      Dollar Dominance Still in Play

      Even though rate spreads aren’t the sole driver of FX markets in the current climate, they remain a key anchor for medium-term direction. Dollar support persists due to resilient US consumer data and a still-hawkish Fed tone. If upcoming trade war rhetoric softens or if US-China tensions ease, the greenback could see reduced risk premiums. However, that doesn't necessarily translate into euro strength—it might only slow the decline.

      Eyes on Bessent and Geopolitics

      Markets are paying close attention to Bessent’s update on US-China negotiations. Should he strike a constructive tone, risk assets may rally, and the EUR/USD could find short-term support near 1.1200. On the geopolitical front, the Russia-Ukraine narrative is still fluid. Talks of a 30-day ceasefire proposed by Trump and Turkey's mediation efforts with Putin and Zelenskyy offer some hope, but markets have grown skeptical of peace breakthroughs. Even a positive announcement may prompt only a muted reaction unless it's seen as durable and enforceable.

      Eurozone Macro – Still a Passenger, Not the Driver

      The eurozone’s influence on EUR/USD remains muted. Tomorrow's ZEW sentiment surveys may stir minor moves, but US factors continue to lead the charge. This week, macro data from Europe is unlikely to alter the broader trend unless significantly divergent from expectations.

      Technicals – All Eyes on the 38.2% Fibonacci and Channel Support

      Visual content

      Wave 4 in Progress – Correction Meets Critical Support

      From a pure Elliott Wave perspective, EUR/USD appears to be undergoing a Wave 4 correction within a broader impulsive rally. Price action has now crept into the 38.2% Fibonacci retracement, a textbook support zone for fourth-wave pullbacks. Historically, Wave 4 corrections tend to find strong bids around this level, aligning with the 1.1090–1.1100 region.

      Confluence at the Lower Channel Boundary

      What's particularly compelling is the confluence of technical supports—not only is EUR/USD at the 38.2% retracement, but it’s also brushing against the lower bound of the descending parallel channel that’s governed price action since the peak near 1.1600 (Wave 3). This double-layered structure sets up a clear make-or-break scenario.

      • bullish bounce from this area would support the idea that Wave 4 has completed, potentially launching Wave 5 toward retesting or even exceeding April highs.
      • decisive break below 1.1090, especially on daily closes, opens the door to deeper retracements toward the 50.0% level near 1.0900, and possibly even 61.8% at 1.0700, should momentum persist.

      Bearish Momentum Intact but Waning

      The steepness of the recent decline within the channel suggests strong short-term bearish momentum. However, the lack of acceleration through support implies sellers may be losing steam, especially ahead of today’s fundamental catalysts.

       

      Disclaimer: Trading leveraged products carries a high level of risk and may result in losses exceeding your initial investment; ensure you fully understand the risks involved.

      Alchemy Markets is a multi-asset brokerage providing retail traders with the same elite trading conditions, tools, and transparency typically reserved for institutions.

      This content may have been written by a third party. LiquidityFinder makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
      Comments
      Most Recent
      Written By
      Daily Newsletter

      LF Daily News

      Daily industry focused newsletter giving you an overview for the financial & finTech industry.

      See All Newsletters
      By clicking "Sign Up" you are agreeing to our Terms of Service and Privacy Policy
      RSS Feeds

      Create a custom RSS Feed

      Select the categories and companies you wish to follow directly to your person rss feed.

      Create Custom RSS Feed

      Related Categories:

      Related Tags:

      #EURUSDPair#FibonacciLevels#ElliotWave#TechnicalAnalysis#EurozoneMacro#USChainaTensions#RussiaUkraineConflict#FederalReserve

      Related Articles:

      Find The Right Partners for
      Your Trading Business

      Sign up and join over 5,000 professional members who receive personalized news alerts, curated professional connections, and more for free!

      Create Your FREE Account
      Get access to latest news, updates, real-time data, brokerage and trading firm insights and customized information feeds.

      Index volatility is asleep while single stocks fight it out underneath, credit refuses to confirm the equity rally, and a bare macro calendar hands next week to oil.

      just now

      Digital assets and FX brokerage GC Exchange FZE (GCEX) has appointed Mohammed A. Mulla as a Board Member of its Dubai-based entity, part of the wider GCEX Group.

      just now

      Learn what Blockchain-as-a-Service is, how it works, and why businesses are using BaaS to build blockchain applications without managing infrastructure.

      just now

      CFDs vs stocks compared on leverage, ownership, costs, dividends, taxes, and risk. Learn the differences between stocks and CFDs and discover which suits your investing or trading goals.

      just now

      Want to master the markets? A winning trading mindset beats a perfect strategy. Learn how emotional discipline helps you conquer fear and avoid heavy losses.

      just now

      Read our latest Gold price action forecast to see how a double top pattern triggered a massive XAU/USD selloff.

      just now

      Wondering how the API weekly report impacts oil prices? Learn how U.S. crude stockpiles and voluntary surveys predict the official EIA report.

      just now

      cTrader Mobile 5.9 introduces a dedicated charts tab, single-tap chart access, a draggable floating action panel and a new focus mode for positions and orders, following the platform's Best Mobile Trading App win at UF Awards Global 2026. Sergey Borisov of Spotware comments on the update.

      just now

      BitPay B.V., the European arm of BitPay, has been authorised as a crypto-asset service provider under MiCA by the Dutch AFM, allowing it to offer regulated crypto and stablecoin payment services, cross-border payments, and consumer spending tools across the EU.

      just now

      Spotex has appointed Joe Tuccio, previously Head of Digital Partnerships at Seabury Capital, as Head of Digital Assets. Tuccio brings 20 years of financial markets experience and will lead partnerships with liquidity providers and custodians as Spotex expands its institutional FX venue into digital assets.

      just now
      Feed