EUR/USD Nears Key 100‑Day EMA as US Funding Vote Adds Directional Risk

EUR/USD technical setup: capped under the 100‑day EMA

EUR/USD is trading around 1.1565 and remains capped just below the daily 100‑day EMA (~1.1575). The 14‑day RSI sits near 44.95, signalling a near‑term downside bias but not an oversold condition. Immediate resistance is the 100‑day EMA at ~1.1575, followed by 1.1668 and the 1.1700–1.1705 area. On the downside, initial support lies at 1.1468, with deeper targets at 1.1403 and 1.1364.

Why US politics matters for the pair

The US Senate voted 60–40 to advance a temporary funding package. While this development can support the US dollar if the bill clears the House and is signed into law, markets are treating the outcome as conditional — see EUR/USD reaction after US funding deal. A completed funding deal would reduce near‑term political risk and could reinforce USD strength, pressuring EUR/USD lower. Conversely, continued uncertainty — or a sudden risk‑on response from relieved markets — could ease USD demand and give EUR/USD room to challenge the 100‑day EMA.

Cross‑market context and risks

Recent flows have responded to both a tech‑led equity correction that lifted safe‑haven demand for the dollar and to hopeful headlines on funding progress that swung sentiment more risk‑on. Traders should monitor equity indices, gold (XAU/USD) and US Treasury moves for corroborating signals. See how USD technical momentum has pressured FX in the past at DXY 200-day SMA. Key risks include a decisive close above 1.1575, which would invalidate the immediate bearish setup and likely open a rally toward 1.1668–1.1700, and a House rejection or presidential refusal to sign the funding bill, which would flip sentiment back toward USD strength.

Practical trading ideas

Tactical short while below 100‑day EMA

Strategy: consider short exposure while price remains below ~1.1575, targeting 1.1468 initially and 1.1403/1.1364 on further confirmation. Suggested risk management: place stops above 1.1575 (tight momentum trades) or above 1.1668 for more confidence that the EMA has been invalidated. Keep position sizes appropriate to account for event‑driven volatility tied to ongoing political headlines.

Alternate scenario — breakout long

If EUR/USD decisively breaks and closes above the 100‑day EMA, traders can look for momentum follow‑through toward 1.1668 and 1.1700. A breakout long should be accompanied by stronger risk sentiment (equities rallying, US yields stable or lower) and ideally a confirmed pick‑up in EUR flows.

How to trade this in an automated workflow

Short‑term binary outcomes around political events make EUR/USD suitable for disciplined, rules‑based strategies. Automated trading and algorithmic risk controls can help enforce entry rules, stop placement and size discipline — particularly when headlines move prices quickly. Retail traders can test setups and manage execution with tools such as a Forex Trading Bot or add tactical overlays via the Trade Assistant Bot.

Practical automation tips

- Backtest short‑below‑EMA and breakout‑above‑EMA rules over multiple news cycles before committing capital. Automated backtests reduce hindsight bias and help quantify expected win rate and drawdown.

- Use time‑based filters around major US political announcements: widen stops or reduce notional size during headline windows to mitigate slippage and spikes.

- Combine technical triggers (EMA close, RSI thresholds) with a simple volatility filter (ATR) so the bot adapts position size when market stress rises.

Broader market note

While this piece focuses on EUR/USD, be mindful of related FX and crypto flows. A sustained risk‑on pulse that weakens the dollar can lift risk‑sensitive FX (GBP/USD, AUD/USD) and increase risk appetite in crypto trading. Conversely, renewed risk‑off will likely tighten correlations between USD strength, equity declines and gold pressure. Traders who execute both forex trading and crypto trading strategies may want to use integrated automated trading solutions to manage cross‑asset exposure efficiently.

Key price levels to watch (summary)

Resistance: 1.1575 (100‑day EMA), 1.1668, 1.1700–1.1705.

Support: 1.1468, 1.1403, 1.1364.

Conclusion and next steps

EUR/USD shows a short‑term bearish bias while capped beneath the 100‑day EMA near 1.1575, with the US funding process and near‑term risk sentiment set to determine directional bias. Traders can pursue short setups with disciplined stops below the EMA or switch to tactical long positions on a confirmed breakout above 1.1575–1.1668. Use clear rules, position sizing and event filters to limit headline risk.

If you want to automate these rules and manage execution across forex and crypto markets, consider testing algorithmic strategies on PlayOnBit. Explore the Forex Trading Bot for EUR/USD workflows and the Trade Assistant Bot to set tactical entries, stops and trailing rules. PlayOnBit offers tools to support both automated trading and discretionary oversight so you can execute consistently across changing market regimes.