EURUSD – fresh rebound requires daily cloud break to improve near-term outlook

The Euro edged higher in early Wednesday trading, supported by a weaker dollar after Fed Chair Powell’s latest remarks were interpreted as dovish, reinforcing market expectations for two rate cuts before year-end.

Fresh upside momentum pushed the pair into the daily cloud (spanning 1.1610–1.1686) and is currently testing the upper boundary of recent congestion near 1.1650, which is further strengthened by the daily Tenkan-sen line and continues to cap the recovery attempts.

A sustained break above 1.1650 is viewed as the minimum condition to maintain the recovery bias, while a move above the cloud top at 1.1680 (also the 38.2% Fibonacci retracement of the 1.1918–1.1542 decline) would confirm the bullish signal and open the path towards 1.1730 (daily Kijun-sen / 50% retracement) and 1.1774 (61.8% retracement / Oct 1 lower top).

However, the overall daily structure remains predominantly bearish, suggesting the potential for the recovery to stall. Slight bullish sentiment is expected to persist while the price holds above the cloud base, but a repeated daily close below it would generate a fresh negative signal and shift focus back to the downside.

Res: 1.1650; 1.1686; 1.1700; 1.1730
Sup: 1.1610; 1.1596; 1.1574; 1.1542