EUR/USD Price: Short-Term Bullish Momentum Builds

The euro-dollar pair has made an impressive comeback after what looked like a classic liquidity trap. After shaking out the weak hands with a quick dip, EUR/USD has bounced back strongly and is now eyeing higher levels. This recovery has shifted the short-term outlook to bullish, with both technical setups and fundamental factors working in favor of further gains.

Technical Setup Points to Continued Strength

The 4-hour EUR/USD chart shows some really interesting developments that support the bullish case. We saw a classic liquidity raid where price dipped down to sweep out stop losses before reversing sharply higher – this kind of move often signals that bigger players are getting ready to push price in the opposite direction.

The recent rally has pushed into buyside liquidity territory, showing that buyers are stepping up when it matters. Price is now consolidating around a Fair Value Gap at roughly 1.1718, and holding this level would be a great sign for the bulls since these gaps often act as launching pads for continuation moves. Below that, we have some solid demand zones marked in orange that previously held price up and could do so again if we see any pullbacks.

This setup aligns with the bullish view from trader @sir_hisham, who’s been calling for short-term strength in the pair.

Fundamental Factors Supporting the Move

Several macro trends are working in EUR/USD’s favor right now. The U.S. dollar has been weakening as economic data softens and markets start pricing in the possibility that the Fed might pause its policy tightening. Meanwhile, the eurozone is showing signs of stability with inflation moderating and growth holding up better than expected. On top of that, we’re seeing improved risk sentiment globally, which typically reduces demand for the dollar as a safe haven and gives pairs like EUR/USD room to move higher.

Key Levels Ahead:

• Bullish scenario: Hold above 1.1718 FVG for targets at 1.1800–1.1850
• Bearish scenario: Break below 1.1718 could see a retreat to 1.1600 demand zone

If EUR/USD can stay above that 1.1718 Fair Value Gap, the next logical targets sit around 1.1800–1.1850 where we might see some profit-taking. On the flip side, if we lose that key support level, buyers might get another chance to step in around the 1.1600 area before attempting another push higher.