The euro edged higher against the US dollar on Monday, regaining ground above the mid-1.1300s as traders reacted to key technical support holding on the charts. The recovery follows a period of consolidation, with the 200-period simple moving average (SMA) on the four-hour chart emerging as a critical support zone.
After briefly dipping last week, EUR/USD bounced back, helped by a combination of softer US dollar momentum and investor confidence in a stabilizing eurozone economy. The pair’s ability to stay above the 1.1340–1.1350 region was seen as a positive technical signal, calming concerns about further downside in the near term.
EUR/USD 1-D Chart as of May 5th, 2025 (Source: TradingView)
Market participants are now closely watching for confirmation that the euro can sustain gains above this level. “The 200-period SMA on the H4 chart is acting like a floor for the pair,” said one strategist. “As long as that holds, buyers remain in control—at least for now.”
The US dollar, meanwhile, continues to face headwinds from mixed economic data and shifting Federal Reserve expectations. With inflation appearing to cool slightly, investors are cautious about the Fed’s next move, which has left the greenback on uneven footing in recent sessions.
On the European side, recent PMI data and consumer sentiment readings have been more stable, giving the euro modest support. While the European Central Bank remains cautious, any sustained improvement in economic conditions could bolster the single currency further in the coming weeks.
For now, EUR/USD looks supported above the mid-1.1300s, with traders watching technical levels and upcoming US inflation data for the next catalyst. A clear break above recent highs could pave the way for a stronger move, but much will depend on broader macro signals.
