EUR/USD is attempting to break out
EUR/USD has extended its recovery after weaker-than-expected US ADP employment data and is testing resistance around $1.155. A confirmed breakout could put $1.161 and the 200-day moving average near $1.163 in focus, although the 7 August US employment report remains the main risk.
Founder, Mott Capital Management
EUR/USD tests resistance around $1.155
The euro continued to extend its recent gains on 5 August after a weaker-than-expected ADP employment report in the US. EUR/USD is now attempting to break above its previous high around $1.155, reached on 3 August.
A breakout above this level could send the euro towards $1.161, last seen on 16 and 17 June, which appears to be the next area of resistance.
Momentum indicators have turned positive
The euro is also breaking out on the relative strength index (RSI), which has moved above 50 and climbed to 63, indicating that momentum has turned positive.
EUR/USD has also broken above its 50-day moving average and still has room to rise before reaching its 200-day moving average near $1.163. Finally, the pair appears to be breaking above a downtrend. If confirmed, that would suggest the longer-term weakness since late January may be passing.
EUR/USD, December 2025 – present
Source: TradingView, 5 August 2026
The 200-day moving average could slow the rally
The euro therefore appears well positioned to extend its recovery and erase much of the decline recorded between mid-June and the end of June. However, EUR/USD could begin to consolidate just below the 200-day moving average.
US jobs data remain the main risk
The main risk is a stronger-than-expected US employment report on 7 August, which could cause the euro to reverse much of its recent gains. It is also worth noting that EUR/USD is approaching the 78.6% Fibonacci retracement level.
That retracement could act as final resistance. If it holds, the euro could move back towards the $1.134 region.
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