Ascending trendline and EMA50 could help EURUSD retest 1.173

In August, the EURUSD currency pair moved in a flat, confined by 1.157 and 1.173. In early September, the price attempted to break out of this range but failed, plummeting by the end of yesterday’s trading session. However, a 7-month ascending trendline, along with the 50-day exponential moving average (EMA50) located nearby, prevented the pair from retesting the 1.157 level. This solid support could propel EURUSD back toward resistance at 1.173.

The MACD’s upward momentum has stalled, but the indicator remains in positive territory, limiting bear activity in the market. At the same time, the RSI sits close to 50, suggesting that the quotes might move in either direction. This support structure is visible not only on the pair’s daily chart but also on the H4 timeframe, increasing the probability of a rebound.

Yesterday, traders focused on political news from France, where the Prime Minister could be dismissed next week due to a budget crisis. Thus, little attention was paid to the preliminary EU inflation data for August. Meanwhile, the statistics came in worse than expected, with the Consumer Price Index (CPI) once again climbing above the European Central Bank’s target of 2%. Considering this, there is more than a 90% chance that the ECB will take a pause at its meeting on September 11.

A Reuters poll showed that the European regulator is not expected to ease monetary policy again until spring 2026. ECB official Isabel Schnabel said in her interview yesterday that the current rate level is sufficiently stimulative for the EU economy, so there is little reason to lower them further. However, significant uncertainty over the inflation outlook remains, as the effects of US duties are just about to kick in.

Consider the following trading strategy:

Buy EURUSD at the current price. Take profit: 1.173. Stop loss: 1.157.