EUR/USD Bear Flag Tightens Between 1.1450 and 1.1500
The EUR/USD has been trading in a tight range between 1.1450 and 1.1500 since last Thursday, reflecting its bearish bias. The pair currently trades at 1.1463, below both its 50-hour moving average at 1.14754 and its 100-day SMA at 1.1545.
The rate gap between the Fed's upper bound of 4.00% and the ECB's deposit rate of 2.50% is a key driver of EUR/USD, with the dollar gaining an advantage as long as this spread holds or widens. The forward path is what currency markets trade, and here the dollar has the edge, with Fed funds futures pricing a 90% chance of another Fed hike by December.
The technical structure matches the fundamentals, with momentum negative on the 4-hour chart and the MACD below zero. A daily close above 1.1535 would invalidate the bearish view, but a break lower toward 1.1410 and then 1.1365 remains a likely scenario.