(MENAFN- Daily Forex) Bullish view

• Buy the EUR/USD pair and set a take-profit at 1.1840.
• Set a take-profit at 1.1600.
• Timeline: 1-2 days.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 1.1600.
• Add a stop-loss at 1.1840.

The EUR/USD exchange rate held steady after the European Central Bank (ECB) delivered its interest rate decision and after Fitch downgraded France. It was trading at 1.1735, a range it has been in the past few days as focus now shifts to the upcoming Federal Reserve decision Reserve interest rate decision

The EUR/USD exchange rate was little changed after the ECB left interest rates unchanged in the last meeting, as the economy weathered Donald Trump's tariffs.

The continued pause was in line with what analysts were expecting as inflation has moved close to the bank's target. Also, there are signs that the economy is holding better than expected amid Trump's tariffs.

The main concern for the ECB is that France, the bloc's second-biggest economy, is going through a difficult crisis, with the ten-year yield rising to 3.50% on Friday. Fitch, a major ratings agency, slashed its credit score from AA to A+.

The next key EUR/USD catalyst will come from the United States where the Federal Reserve will conclude its two-day meeting on Thursday. This meeting is important because it will be the first time that the bank slashes interest rates this year.

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Most economists believe that the bank will cut rates by 0.25% in this meeting, while some of them see it slashing by 50 basis points. The bank's main concern is that the labor market has softened substantially this year, with the unemployment rate rising to 4.3% in August.

The EUR/USD pair will react mildly to the upcoming US retail sales numbers on Tuesday. Economists expect the report to show that retail sales softened from 3.9% in July to 3.2% in August.

EURUSD Chart by TradingViewEUR/USD Technical Analysis

The daily timeframe chart shows that the EUR/USD exchange rate has rebounded from last month's low of 1.1390 to 1.1735, a few points below the year-to-date high of 1.1830.

The pair is being supported by the 50-day and 100-day Exponential Moving Averages, a sign that bulls remain in control. It has also formed an inverse head-and-shoulders pattern.

The EUR/USD pair is stuck at the ultimate resistance point of the Murrey Math Lines tool. Therefore, the most likely EUR/USD signal is bullish, with the longer-term target being the extreme overshoot level at 1.1962.

The most immediate target for the pair is at the overshoot point at 1.1840, which coincides with the year-to-date high of 1.1835.

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