"EUR/USD Trading Plan: Key Support, Resistance & Entry Points

As of March 6, 2025, the EUR/USD currency pair has experienced significant movements influenced by both fundamental developments and technical factors. Below is a comprehensive analysis incorporating multiple timeframe perspectives, key support and resistance levels, breakout points, and a detailed trade setup with clear entry and exit points, including take profit and stop loss levels.

Fundamental Overview

The euro has recently surged, marking its largest three-day rally since November 2022, rising 3.1% to $1.07. This uptick is attributed to increased European spending and a slowing U.S. economy. Germany's plans to exempt defense spending above 1% of GDP from its "debt brake" and establish a €500 billion infrastructure fund, along with a proposed €150 billion EU rearmament loan from the European Commission, have contributed to the euro's strength. Conversely, weak U.S. data and increased tariffs on Mexico, Canada, and China have weakened the U.S. dollar, with the dollar index hitting its lowest since November at 104.85.

Additionally, the European Central Bank (ECB) is set to cut its deposit rate to 2.50% on March 6, 2025, aiming to spur growth amid a sluggish eurozone economy and escalating trade tensions. This monetary easing stance is expected to influence the EUR/USD dynamics.

Technical Analysis

Monthly Timeframe:

The EUR/USD continues to trade within an ascending pitchfork formation extending from the 2022 low. The April advance previously faltered just ahead of resistance at 1.1275 into the close of Q2. The subsequent reversal was poised to close a third-consecutive monthly loss as of late December, with EUR/USD attempting to mark a close below support around the 2015 low at 1.0463.

Weekly Timeframe:

Recent price action shows a rebound from the 1.0200 level, which aligns with the 23.6% Fibonacci retracement of the broader uptrend. This area has acted as a significant support level, leading to the recent bullish momentum.

Daily Timeframe:

The pair is comfortably trading beyond the 1.0500 mark, slightly lower than the recent yearly highs around 1.0560. Immediate resistance stands at the 2025 top of 1.0559 (March 4).

Key Support and Resistance Levels

Support:

1.0463 (2015 low)

1.0200 (23.6% Fibonacci retracement)


Resistance:

1.0559

1.0939

1.1038



Trade Setup

Strategy: Given the recent bullish momentum and fundamental support, a long position is favored.

Entry Point: 1.08313

Take Profit: 1.0930 (just below the March high resistance)

Stop Loss: 1.0450 (below the 2015 low support)


Risk Management: This setup offers a risk-to-reward ratio of approximately 1:2, aligning with prudent trading practices.

Conclusion

The EUR/USD pair's recent surge is underpinned by both fundamental developments, such as increased European fiscal spending and anticipated ECB rate cuts, and technical factors, including rebounds from key support levels. Traders should monitor upcoming economic data releases and central bank communications closely, as these could influence the pair's trajectory. Adherence to the outlined trade setup and vigilant risk management are essential for navigating the current market environment


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