Euro extends gains as the dollar weakens further

EUR/USD rises for the third consecutive day, driven by a weaker dollar amid speculation about the scale of the Fed’s rate cut expected on Wednesday.

The recovery, originating from a higher base formed after a double rejection just above the psychological 1.10 support, has retraced 61.8% of the 1.1201/1.1002 pullback, enhancing upside potential.

The daily chart shows an improved outlook, with moving averages returning to a bullish setup and the RSI continuing to rise above neutral territory. However, the ascending 14-day momentum remains in negative territory, signaling a potential slowdown in the recovery.

A daily close above the 61.8% Fibonacci retracement level at 1.1125 is needed to generate a fresh bullish signal, targeting a break of 1.1154 (the 76.4% Fibonacci retracement and September 6 spike high). Such a break would neutralize downside risks and pave the way for a full retracement of the 1.1201/1.1002 correction.

Be cautious if the price fails to sustain above 1.1125 and falls back below the 20-day moving average at 1.1092, as this would weaken the near-term structure.

Res: 1.1129; 1.1154; 1.1184; 1.1201
Sup: 1.1101; 1.1092; 1.1065; 1.1049