CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% 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.
Create Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% 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.
Create Account
✖

EUR/USD Rate Cut Rally After Bullish Defense of 1.1000

Article By: ,  Sr. Strategist
September 13, 2024 6:31 PM

EUR/USD Talking Points:

  • The European Central Bank reduced rates again this week and the door is open for more possible softening in the months ahead.
  • This might not be visible from the EUR/USD chart, however, as the pair posed a stark rally in the aftermath of that rate decision.
  • I’ll be looking into these setups in the Tuesday webinar and you’re welcome to join, click here for registration information.

EUR/USD put in a sizable rally from the start of Q3 and into late-August trade. This pushed the pair to deeply-overbought conditions on the daily, and price even came close to overbought territory via RSI on the weekly chart, with a 69.8 read three weeks ago.

The fundamental case for such a move was lacking as the European Central Bank remains in a dovish position, with more rate cuts likely to follow the most recent adjustment on Thursday. And for the early part of the past week, it looked as though EUR/USD bears might be able to force a push. But the 1.1000 level proved to be a tough level for bears to beat as support showed two pips-above ahead of the ECB meeting, which then led to a strong bounce after the bank’s rate cut announcement.

At this point from the four-hour chart, we can see where this produced a higher-high above the prior lower-high. This is shorter-term but, it does provide some scope for buyers if they can defend that structure to make another forward push towards 1.1140 or perhaps even the 1.1200 level that turned-around price a few weeks ago.

 

EUR/USD Four-Hour Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

 

EUR/USD Daily: Possible Bull Flag

 

Taking a step back we can see some symmetry between recent support and resistance, helping to establish a channel. This could add some enthusiasm on the long side but the key will be a bullish breach of the formation, which also highlights the importance of 1.1140. And, shorter-term, the 1.1081 level.

Of course, for this formation to fill, we’ll likely need to see some continued USD-weakness and with FOMC on the calendar for next week, the range of possible outcomes widens significantly. The question there will likely go back to the Fed’s dot plot matrix and how many cuts the bank is looking to push for the rest of this year and through 2025 trade.

 

EUR/USD Daily Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

 

EUR/USD Big Picture

 

At this point, the case can still be made that EUR/USD exists within a year-and-a-half long range. Last year’s high printed right at the 61.8% Fibonacci retracement of the 2021-2022 major move at 1.1275, and that becomes the next major level in bullish scenarios for the pair in which buyers are able to push a break above the 1.1200 level that held the highs a few weeks ago.

This also places more importance on the 1.0943-1.1000 zone, which has so far exhibited support at prior resistance. If bulls fail to hold that then range continuation scenarios remain in-play.

 

EUR/USD Weekly Price Chart

Chart prepared by James Stanley, EUR/USD on Tradingview

 

--- written by James Stanley, Senior Strategist

 

 

 

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.

StoneX Europe Ltd 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 supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.6% 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. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd 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 supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

© FOREX.COM 2025