EURUSD Gains Capped on NFP Results, 8-Month Resistance

Key Events
• EURUSD pulls back below 1.19 on a 7-month high NFP print
• DXY challenges a multi-year trendline, keeping currency markets and precious metals on edge
• Energy prices tilt to the upside, potentially reinforcing rate hold policies should inflation risks resurface

Energy prices tilting higher are reviving inflationary concerns, driven by cyclical rotations out of AI sectors and persistent US-Iran tensions keeping crude oil on a bullish edge near the 66 zone. This level remains a defining barrier between another pullback or a longer-term breakout toward the 70s once again.

This upside tilt in energy is bringing inflation risks back into focus across major economies. Lagarde noted in the latest policy hold that the ECB remains data-dependent, while the relative strength of the euro offers a degree of protection against external uncertainty.

EURUSD managed to climb above the 1.19 mark in an attempt to extend toward the 1.20 zone. However, the move reversed after NFP results exceeded expectations, printing a positive change of 130k, a 7-month high, reinforcing Fed rate hold expectations. The release stabilized the DXY above its 18-year trendline and pressured EURUSD below its 8-month trendline. Attention now shifts to the upcoming US CPI results, which may define the next breakout from current consolidation ranges.

Technical Analysis: Quantifying Uncertainties

EURUSD Outlook: Monthly Time Frame – Log Scale

Source: Trading view

From a monthly perspective, EURUSD’s bullish bias is challenging a trendline connecting higher highs since July 2025, with the latest spike reaching 1.2080 and a monthly close near 1.1850.

Given the broader fundamental backdrop and the potential for dollar strength to hold, unless a clear daily or weekly close above 1.1950 emerges, EURUSD may face renewed selling pressure toward 1.1760 and 1.1580 before a deeper drawdown toward the 1.12 zone unfolds.

The monthly RSI is hovering at overbought levels last seen in 2021 and 2018, increasing the risk of a corrective move should the 1.180–1.1760 zone give way.

On the upside, a sustained close above 1.1950 would target highs last seen in 2021 and 2018 at 1.23 and 1.25, respectively.

The chart that remains in focus is the DXY, holding above its multi-year trendline, defining either a structural shift in the 18-year cycle below the 95 mark or a continuation of the broader bullish structure.

DXY Outlook: Monthly Time Frame – Log Scale

Source: Trading view

Written by Razan Hilal, CMT

Follow on X: @Rh_waves

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.