EUR/USD RSI Rebound Fails at 1.1600, Bearish Bias
EUR/USD remains capped below 1.1600 after an RSI rebound from oversold levels failed to hold above the key resistance. RSI recovered from near 30 but still struggles below the 50 midline, a sign momentum is not turning bullish. Technical structure stays bearish with a lower-high pattern through 1Q 2025, and overhead resistance is reinforced by the 50-day and 200-day SMAs.
Key levels traders are watching: 1.1600 as the critical barrier (psychological + technical confluence). Near-term resistance also appears around 1.1560. Support sits at 1.1520; a break could accelerate selling toward 1.1450. Traders are advised to wait for confirmation: a daily close above 1.1620 would weaken the bearish case. Otherwise, the “path of least resistance” remains to the downside.
Fundamentally, the euro faces pressure from ECB’s cautious, data-dependent stance versus a relatively more hawkish Fed. The interest-rate differential continues to favor the USD, supported by resilient US labor data and persistent core inflation. Balance-sheet runoff differences also weigh on EUR/USD capital flows.
Positioning is mildly supportive of bears: CFTC COT shows leveraged funds net-short the euro, while the RSI rebound looks more like corrective short-covering than a new uptrend.
Upcoming catalysts: US CPI/PCE, ECB speeches (rate-cut rhetoric), European geopolitical developments, and energy (natural gas) moves.
Bearish
The article’s core message is that EUR/USD remains bearish because the RSI rebound lacks follow-through above the 1.1600 resistance area. Historically, failed RSI rebounds—especially when RSI stays below the 50 midline and price cannot reclaim key moving averages—often precede continuation of the prevailing downtrend. The stated structure (lower highs) and the confluence of 50/200-day SMA near resistance increase the odds of another sell attempt.
In trading terms, this shifts risk toward short setups or staying defensive until a daily close confirms invalidation (above ~1.1620). A break below 1.1520 would likely trigger trend continuation and attract momentum selling, potentially pushing toward 1.1450.
Fundamentally, the ECB–Fed divergence (Fed relatively hawkish, ECB cautious/data-dependent) and ongoing USD liquidity drain from Fed balance-sheet runoff mirror common FX drivers that have repeatedly pressured EUR during “higher-for-longer” USD regimes. That makes the bearish bias more durable in the short-to-medium term, unless upcoming US inflation prints or ECB rhetoric force a reversal in rate expectations.
Overall expected impact: bearish bias with event-driven volatility around CPI/PCE and ECB speeches; long-term outlook stays cautious unless the euro can decisively reclaim the 1.1600–1.1620 zone and improve momentum signals.