There was important news yesterday. According to Forex Factory:

→ The ECB kept its main refinancing rate at 2.15% (as expected).
→ US data indicated a rise in inflation – albeit a moderate one. On a year-on-year basis, the CPI increased from 2.7% to 2.9%, in line with analysts’ expectations.

At the same time, all incoming news is being assessed by traders in light of the forthcoming Federal Reserve decision – according to media reports, yesterday’s data did not have a significant impact on market sentiment, and a 25-basis-point rate cut is still expected.

EUR/USD market movements suggest a balance, although some bearish signs are emerging.

EUR/USD Technical Analysis

Using key highs and lows, we can draw an ascending channel (highlighted in blue) that began in August.

From a bearish perspective:

→ The 1.17400 level has regained its role as resistance.
→ The steep upward trend from early September (shown in orange) was broken by bears around 1.17525.

Therefore, the 1.17400–1.17525 zone appears to act as a resistance area, which is already influencing the price:

→ Last night, EUR/USD’s rise was halted within this zone.
→ Today, a move above 1.17400 led to a sharp downward reversal.

Overall, this behaviour has formed a bearish double top pattern.

From a bullish perspective:

→ Yesterday, the price formed a long lower shadow (indicated by the arrow).
→ During the subsequent rise, the strength of buyers was confirmed. A bullish Fair Value Gap pattern may be forming, and this area—where an imbalance between buyers and sellers occurs—could act as support.

However, if the bears continue to assert their emerging dominance, the FVG area could be broken, in which case it may then act as resistance.

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