EURUSD – correction under new 2025 peak – positioning for potential 1.20+ acceleration

The Euro edged higher on Friday as the second leg of pullback from new 2025 peak (1.1918) found footstep at important Fibo support at 1.1655 (50% retracement of 1.1391/1.1918 rally).

Near-term bears take a breather after strong fall in past two days, with more quiet action seen ahead of release of important US inflation data (PCE), due later today.

Technical picture on daily chart is bearishly aligned (negative momentum / 10/20/55DMA’s in bearish setup) but oversold stochastic partially counters negative factors.

Solid supports lay at 1.1625/10 (thin daily cloud) and double Fibo at 1.1590 zone (61.8% of 1.1391/1.1918, reinforced by 100DMA and 38.2% of larger 1.1065/1.1918 rally), also former higher base late Aug / early Sep) where bears may face increased headwinds.

The pair holds in corrective phase of broader uptrend, which so far remains intact and sees current dips as positioning for fresh push higher.

The notion is supported by positive outlook for the single currency on weaker dollar, driven by growing expectations for more policy easing (markets expect Fed to deliver two more rate cuts by the end of 2025 and to drop the borrowing cost by 1% in total by the end of next year), with signals of potential 500 bln euros stimulus to the German economy, to provide additional support

Res: 1.1717; 1.1738; 1.1765; 1.1820
Sup: 1.1650; 1.1625; 1.1590; 1.1516