EUR/USD Breakout Potential, USD Support into February Close

By :

, Sr. Strategist

EUR/USD, US Dollar Talking Points:

The US Dollar breakout that hit in Q4 has stalled so far in 2025, with a doji for January and a bearish February showing, so far.
In a mirror image, EUR/USD is showing a morning star pattern on the monthly chart that could confirm this week if buyers are able to hold the line.
The tariff topic continues to dominate headlines but even at its most tense earlier this month, it produced a lower-high in DXY.
The 1.0500 level has been in-play for five of the past six weeksv, but notably, February has so far been a build of higher-lows, above the January swing-low.

It’s been a recovery type of month so far for EUR/USD, as the Q4 sell-off in the pair continued through the first couple weeks of the New Year. But, after setting a low on January 13^th, along with USD setting a high on the same day, EUR/USD has shown signs of recovery.

Bulls haven’t exactly been able to take control of the matter but bears have been showing less and less drive, leading to a build of higher-lows. At this point, resistance remains around the 1.0500 handle in EUR/USD but the frequency of tests has been increasing, and bulls have soon have an open door to run a breakout.

Notably from the monthly chart, EUR/USD is working on a non-complete morning star formation. The February monthly bar finishes this week, and if buyers can hold the line and complete the formation, that would point to further recovery potential ahead.

EUR/USD Monthly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD Weekly

From the weekly chart, we can see the 1.0500 level coming into play for five of the six past weeks. And so far, bulls haven’t been able to drive a sustained breakout above that level. But also notable is the fact that the higher-lows that have built through February show that diminishing marginal impact from bears, leading to the bullish breakout potential in the final week of the month.

EUR/USD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

From the daily chart, we can get some additional context, with the 1.0523-1.0533 zone coming into play to hold the highs so far this week. That’s the expanse between the 76.4 and 78.6% Fibonacci retracements of the December-January sell-off, and this is the resistance zone that bulls need to beat to drive the breakout and take-control.

For next levels overhead, it’s the 1.0611 level that sticks out, as this is a confluent spot of Fibonacci levels as the 38.2% retracement of both the 2021-2022 sell-off and the 38.2% marker of the bounce from that move, taking the 2022 low to the 2023 high.

If bulls can force the break, that’s the next major level to look for price to engage with.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

EUR/USD, US Dollar Talking Points:

The US Dollar breakout that hit in Q4 has stalled so far in 2025, with a doji for January and a bearish February showing, so far.
In a mirror image, EUR/USD is showing a morning star pattern on the monthly chart that could confirm this week if buyers are able to hold the line.
The tariff topic continues to dominate headlines but even at its most tense earlier this month, it produced a lower-high in DXY.
The 1.0500 level has been in-play for five of the past six weeksv, but notably, February has so far been a build of higher-lows, above the January swing-low.

It’s been a recovery type of month so far for EUR/USD, as the Q4 sell-off in the pair continued through the first couple weeks of the New Year. But, after setting a low on January 13^th, along with USD setting a high on the same day, EUR/USD has shown signs of recovery.

Bulls haven’t exactly been able to take control of the matter but bears have been showing less and less drive, leading to a build of higher-lows. At this point, resistance remains around the 1.0500 handle in EUR/USD but the frequency of tests has been increasing, and bulls have soon have an open door to run a breakout.

Notably from the monthly chart, EUR/USD is working on a non-complete morning star formation. The February monthly bar finishes this week, and if buyers can hold the line and complete the formation, that would point to further recovery potential ahead.

EUR/USD Monthly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD Weekly

From the weekly chart, we can see the 1.0500 level coming into play for five of the six past weeks. And so far, bulls haven’t been able to drive a sustained breakout above that level. But also notable is the fact that the higher-lows that have built through February show that diminishing marginal impact from bears, leading to the bullish breakout potential in the final week of the month.

EUR/USD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

From the daily chart, we can get some additional context, with the 1.0523-1.0533 zone coming into play to hold the highs so far this week. That’s the expanse between the 76.4 and 78.6% Fibonacci retracements of the December-January sell-off, and this is the resistance zone that bulls need to beat to drive the breakout and take-control.

For next levels overhead, it’s the 1.0611 level that sticks out, as this is a confluent spot of Fibonacci levels as the 38.2% retracement of both the 2021-2022 sell-off and the 38.2% marker of the bounce from that move, taking the 2022 low to the 2023 high.

If bulls can force the break, that’s the next major level to look for price to engage with.

EUR/USD Daily Price Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Strategist

EUR/USD, US Dollar Talking Points:

The US Dollar breakout that hit in Q4 has stalled so far in 2025, with a doji for January and a bearish February showing, so far.
In a mirror image, EUR/USD is showing a morning star pattern on the monthly chart that could confirm this week if buyers are able to hold the line.
The tariff topic continues to dominate headlines but even at its most tense earlier this month, it produced a lower-high in DXY.
The 1.0500 level has been in-play for five of the past six weeksv, but notably, February has so far been a build of higher-lows, above the January swing-low.

Video

It’s been a recovery type of month so far for EUR/USD, as the Q4 sell-off in the pair continued through the first couple weeks of the New Year. But, after setting a low on January 13^th, along with USD setting a high on the same day, EUR/USD has shown signs of recovery.

Bulls haven’t exactly been able to take control of the matter but bears have been showing less and less drive, leading to a build of higher-lows. At this point, resistance remains around the 1.0500 handle in EUR/USD but the frequency of tests has been increasing, and bulls have soon have an open door to run a breakout.

Notably from the monthly chart, EUR/USD is working on a non-complete morning star formation. The February monthly bar finishes this week, and if buyers can hold the line and complete the formation, that would point to further recovery potential ahead.

EUR/USD Monthly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD Weekly

From the weekly chart, we can see the 1.0500 level coming into play for five of the six past weeks. And so far, bulls haven’t been able to drive a sustained breakout above that level. But also notable is the fact that the higher-lows that have built through February show that diminishing marginal impact from bears, leading to the bullish breakout potential in the final week of the month.

EURUSD AD

EUR/USD Weekly Price Chart

Chart prepared by James Stanley; data derived from Tradingview

From the daily chart, we can get some additional context, with the 1.0523-1.0533 zone coming into play to hold the highs so far this week. That’s the expanse between the 76.4 and 78.6% Fibonacci retracements of the December-January sell-off, and this is the resistance zone that bulls need to beat to drive the breakout and take-control.

For next levels overhead, it’s the 1.0611 level that sticks out, as this is a confluent spot of Fibonacci levels as the 38.2% retracement of both the 2021-2022 sell-off and the 38.2% marker of the bounce from that move, taking the 2022 low to the 2023 high.

If bulls can force the break, that’s the next major level to look for price to engage with.