EUR/USD coils below 1.0840 as ECB repricing builds

EUR/USD has spent the first week of August grinding higher within a shallow ascending channel, and the technical picture now favours the bulls into the 1.0840 resistance shelf. Price has reclaimed both the 1.0838 pivot and the descending trendline drawn off the mid-July swing high, a combination that typically precedes a test of the range top.

The fundamental backdrop is doing the heavy lifting. Thursday's stickier-than-expected eurozone core CPI forced markets to trim the pace of ECB easing they had penciled in, narrowing the rate differential that had capped the pair through late July. On the dollar side, a run of softer US labour indicators has pulled front-end yields lower and dragged the DXY back to 104.28.

Momentum studies corroborate the bid: the 4-hour RSI sits in the mid-60s with room before overbought, and the MACD histogram has flipped positive after a bullish crossover. The key structural line remains 1.0840 — the swing high that has capped every rally since June. A daily close above it would open the measured-move objective toward 1.0880 and, on extension, the 1.0920 congestion zone.

The bearish invalidation is clean. A close back below 1.0805 would neutralise the near-term structure and re-expose 1.0770, the month-end low. Traders should also respect event risk: Friday's US payrolls can override any technical setup in a single print, so position sizing and a defined invalidation matter more than usual this week.