Chart of The Day – EUR/USD Awaits Germany CPI Reacting to Possible ECB Policy Change

g toward EURUSD. If the ECB ultimately decides to raise rates, the euro could benefit in the short term, although the central bank would risk further weakening economic activity in exchange for making additional progress in the fight against inflation. On the other hand, a decision to leave rates unchanged—despite markets being almost fully convinced of a hike—could weigh on the euro and pressure EURUSD, which is currently trading within an interesting technical formation.

Technical Analysis (D1 Timeframe)

On the daily chart, EURUSD remains trapped within a medium-term symmetrical triangle , a consolidation pattern that has been developing since March. The pair is now trading very close to the apex of the formation, suggesting that a breakout and a stronger directional move may be approaching. Price is currently oscillating around the 50-day EMA (1.1695) and the 200-day EMA (1.1670) . The two moving averages are trading very close to each other, confirming the lack of a clear trend and highlighting the market’s transition into a balanced, range-bound environment. EURUSD remains slightly below the 50-day EMA but above the 200-day EMA, maintaining a broadly neutral technical setup. The upper boundary of the triangle is currently located around 1.1680–1.1700 , while key support can be found near 1.1630–1.1650 . The market has respected both boundaries multiple times, with April and May highs repeatedly stalling near resistance and March and May lows establishing a rising support line. From a technical perspective, breakouts from symmetrical triangles often lead to sharp directional moves, particularly when they occur close to the apex of the pattern. MACD and RSI The MACD remains below the zero line, although the histogram is clearly reducing its negative readings. This suggests:

• Fading bearish momentum,
• The potential emergence of a bullish signal if the MACD line crosses above the signal line.

While this is not yet a definitive buy signal, selling pressure appears to be weakening. Meanwhile, the RSI is hovering around 48 , almost exactly at neutral territory. This leaves room for both an upside breakout and a downside move without indicating either overbought or oversold conditions. Key Levels to Watch Support:

• 1.1640–1.1650 (lower boundary of the triangle)
• 1.1600
• 1.1540

Resistance:

• 1.1680–1.1700 (upper boundary of the triangle)
• 1.1760
• 1.1820–1.1850

Bullish Scenario

A break above 1.1700 accompanied by a daily close above the upper boundary of the triangle would represent the first major signal of renewed bullish momentum. In such a scenario, EURUSD could initially target the 1.1760 area before potentially retesting April highs near 1.1820–1.1850 . Bearish Scenario If the pair fails to overcome resistance and instead breaks below support around 1.1640 , the risk of a move toward 1.1600 and subsequently 1.1540 would increase significantly. Such a breakout would also be supported by the MACD remaining below the zero line.

Conclusion

From a technical standpoint, EURUSD is currently at an equilibrium point. The most important feature on the chart remains the narrowing symmetrical triangle, which points to an approaching breakout. As long as the pair remains trapped between 1.1640 and 1.1700 , neither bulls nor bears have a clear advantage. However, the gradual fading of bearish momentum on the MACD slightly increases the probability of an upside breakout attempt in the coming sessions.

Source: xStation5

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