EUR/USD climbs to 1.1450 after breaking above nine-day EMA

The euro extended its advance against the dollar as a break above a key technical level opened the door for further gains.

EUR/USD rose to near 1.1450 on Monday, breaching the nine-day exponential moving average for the first time in two weeks as the US Dollar Index struggled to hold above the 98.70 level. The pair's move above the short-term moving average signals a shift in momentum after price action had been compressed below the indicator since late June.

"The break above the nine-day EMA is a near-term bullish signal for EUR/USD, but the real test lies at the 1.1500-1.1520 resistance zone," said Arslan, a finance MBA and behavioral finance specialist at FXStreet. "The dollar's inability to sustain gains above 99.00 on the DXY is giving euro bulls an opening, though the broader trend remains range-bound."

The US Dollar Index was stuck at 98.73, consistently failing to hold gains below a descending trendline that has capped upside since April. The 98.80-99.00 zone, where previous support turned resistance, has acted as a magnet that sellers continue to defend. A rejection wick near 99.20 on the daily chart suggests sellers remain active at higher levels, with the RSI hovering around mid-levels reflecting a lack of conviction on either side.

The euro's gains come as markets await the Federal Reserve's rate decision later this week, with the central bank widely expected to hold rates at 3.50%-3.75%. March US inflation came in at 3.3% year-over-year, up from 2.4% previously, driven largely by a 12.5% spike in energy costs that complicates the Fed's path forward. Across the Atlantic, the European Central Bank is expected to leave its deposit rate at 2.00% at its April 30 meeting, with eurozone growth forecast at 1.1%-1.3% and inflation stuck at 2.0%-2.2%.

Technical levels to watch

EUR/USD is hovering just above its rising trendline that has served as support since April, though the pace of gains has slowed near resistance. Price sits above the 50 EMA while the 200 EMA below provides a safety net. The RSI is drifting downward from mid-levels, indicating buyers are losing some conviction at current prices.

A sustained break below 1.1420 could trigger a slide toward 1.1380 and 1.1320, according to technical analysis from FXStreet. On the upside, a clean move above 1.1500 would open the path toward 1.1550 and 1.1600, reviving bullish momentum that has been absent since the pair's April rally.

The broader macro backdrop remains supportive for the dollar in the medium term, with geopolitical tensions between the US and Iran keeping safe-haven demand elevated. However, the dollar's failure to break above 99.20 on the DXY suggests the recovery is fragile within a larger bearish setup. If the DXY cannot clear 99.00, a slide toward 98.20 and 97.80 becomes increasingly likely, which would provide further tailwinds for EUR/USD.

This article is for informational purposes only and does not constitute investment advice.