5 min readFor today’s technical update on EUR/USD, we are zooming in on the recent price action with the backdrop of a weakening US dollar. Major institutions are taking note, with Morgan Stanley forecasting a potential 9% decline in the dollar index (DXY) by mid-2026. In addition, Moody’s has downgraded the United States, raising further concerns about the strength of the greenback.
All of this comes amid what could be the early stages of a major paradigm shift in global trade, triggered by President Trump’s newly announced tariffs. These changes signal a potential move away from the US as a consumption-led economy toward a more manufacturing-focused model. Whether this also signals a long-term shift in the US dollar’s role as the world’s reserve currency remains to be seen, but price action across FX markets suggests that something big may be underway.
Looking at EUR/USD on the weekly chart, we can see that price broke through a major resistance level at around 1.12 back in April, a level that had kept the pair capped since early 2022. This breakout pushed EUR/USD into a zone it hasn’t traded in for over three years, reinforcing the idea that this could be the start of a broader trend of dollar weakness.
Dropping into the daily time frame, we revisit the market structure we highlighted in previous updates. The latest swing low at around 1.11 held firmly at the 0.618 Fibonacci level and the 50-day exponential moving average, offering strong confluence for support. Price is now testing local highs, and a confirmed breakout would reassert the bullish daily trend and bring all time frames into alignment to the upside.
Zooming into the 4-hour chart, we can see that the expected reaction to the confluence zone around 1.1340 failed to hold, and price moved lower to test the 1.12 region, which aligned perfectly with high time frame support. That level held, and we are now seeing bullish momentum resume, with EUR/USD pushing into the 1.14 region. If this move continues, the next resistance comes in around 1.1550, marked with a one on the chart below.
While some analysts are calling for a deeper decline in the dollar, EUR/USD remains confined within a broader range between 1.12 and 1.16, which would still represent a new structure not seen in several years, even if not yet aligned with the more aggressive bearish dollar scenarios. Either way, the charts are showing early signs of what could be a significant shift in macro trends.
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