We recently noticed that EUR/USD has been repeatedly fighting around 1.1720. On Friday, although it dipped below this key level, it overall still held above 1.1700, suggesting that the bulls are still standing their ground.

The euro’s rebound on Thursday was mainly driven by the European Central Bank’s stance. While Lagarde did not raise interest rates, she released clear hawkish signals, implying that rates could be raised further in June. In addition, the eurozone’s inflation data came in solid, giving the euro some support. However, the current concern is that the Middle East situation remains deadlocked, and oil prices are stuck above $100, which is putting considerable pressure on energy-importing eurozone countries.

From a technical perspective, EUR/USD is still ranging between 1.1650 and 1.1750. The 1.1750 area is a clear resistance level, while support is near 1.1675. The RSI and MACD signals are not very strong, and it appears that bullish momentum is a bit weakening. If it does break below 1.1675, it could continue to probe lower toward 1.1580 or 1.1500, making the euro’s pullback fairly deep. Trading volume is also not large right now, so we may need to wait until after the holiday period to get a clearer read on the direction.