EUR/USD Price Forecast: What does an emerging double bottom signal as buyers retake control?

EUR/USD rises past 1.1200, with US midterm election results putting the US Dollar under pressure.
Buyers challenge neckline resistance at 1.1250-1.1270 as a possible double bottom takes shape near 1.1100.
Longer-term SMAs still cap the pair, even as RSI and MACD point to strengthening momentum.

Fresh buying lifts EUR/USD back above 1.1200 on Wednesday, as pressure on the US Dollar (USD) following the US midterm election results supports the Euro (EUR). An improving technical backdrop also points to bulls regaining ground after last week’s low of 1.1104, a level not seen since May 2025. EUR/USD is trading near 1.1257 at the time of writing, gaining more than 0.50% on the day.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

The latest rise has brought EUR/USD up to the 1.1250–1.1270 neckline of a possible double-bottom formation near 1.1100 on the daily chart. Buyers have gained a measure of short-term control following a move above the 21-day Simple Moving Average (SMA) at 1.1196. However, the pair continues to trade beneath both the 100-day and 200-day SMAs.

With the Relative Strength Index (RSI 14) around 52 and the Moving Average Convergence Divergence (MACD) moving into positive territory and extending above its signal line, momentum is strengthening. While these indicators lend support to the recovery, confirmation of a broader bullish reversal is still lacking as long as the price remains beneath the longer-term averages.

Confirmation of the double-bottom pattern would require a sustained breakout above the neckline. Such a move would clear a path towards 1.1350, a former support level that could now provide resistance. Beyond that, the 100-day SMA at 1.1421 and the 200-day SMA at 1.1548 present additional barriers. Moving above these averages would undermine the broader bearish outlook.

Initial downside support lies at 1.1200, together with the 21-day SMA. Losing this zone would undermine the recovery and shift attention back to the base at 1.1100. If the pair stays below that base, the double-bottom formation would be invalidated, exposing EUR/USD to additional losses.

Euro: Frequently Asked Questions

Which countries use the Euro, and how widely is it traded?

Used by the 20 European Union countries within the Eurozone, the Euro ranks second only to the US Dollar among the world’s most traded currencies. Its share of all foreign exchange transactions stood at 31% in 2022, with daily turnover averaging more than $2.2 trillion. An estimated 30% of all transactions involve EUR/USD, making it the world’s most traded currency pair. Next come EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

What role does the ECB play in determining the Euro’s value?

Based in Frankfurt, Germany, the European Central Bank (ECB) serves as the Eurozone’s reserve bank, setting interest rates and overseeing monetary policy. Maintaining price stability is the ECB’s main mandate, whether through curbing inflation or supporting growth. Interest rate increases and cuts are its principal policy tools. The Euro generally benefits from relatively high rates, or expectations of rate increases, while the reverse also holds true. Monetary policy is decided by the ECB Governing Council at eight meetings each year. The decision-makers comprise the heads of the Eurozone’s national banks and six permanent members, among them ECB President Christine Lagarde.

Why do inflation figures matter for the Euro?

An important economic measure for the Euro is Eurozone inflation, tracked through the Harmonised Index of Consumer Prices (HICP). A stronger-than-expected rise in inflation, particularly above the ECB’s 2% target, requires the ECB to increase interest rates to bring price pressures back under control. When the region’s interest rates are relatively high compared with those of its counterparts, the Euro usually benefits, as global investors find the region a more attractive destination for their money.

Why does economic data move the Euro?

By indicating the economy’s health, data releases can affect the Euro’s value. GDP, Manufacturing and Services PMIs, employment figures and consumer sentiment surveys are among the indicators that can shape the single currency’s direction. Economic strength supports the Euro by drawing in more foreign investment. It may also prompt the ECB to raise interest rates, directly strengthening the currency. Weak economic readings, by contrast, are likely to weigh on the Euro. Particular attention is paid to data from Germany, France, Italy and Spain, the euro area’s four largest economies, which together represent 75% of the Eurozone’s economy.

Why is the Trade Balance important for the Euro?

The Trade Balance is another key release affecting the Euro. Over a specified period, it captures the difference between a country’s export earnings and its spending on imports. Strong foreign demand for a country’s exports generates additional demand for its currency as overseas buyers seek to purchase those goods, thereby increasing the currency’s value. A positive net Trade Balance therefore strengthens a currency, while a negative balance has the opposite effect.