EUR/USD approaches fair value as US credit concerns boost euro strength

EUR/USD is trading near its fair value levels on Monday as mounting US credit concerns provide underlying support for the euro. The pair has benefited from shifting risk sentiment as investors reassess US fiscal stability amid growing debt ceiling debates and credit rating concerns. European economic resilience continues to contrast with softening US data, creating a favorable environment for euro appreciation. The European Central Bank's relatively hawkish stance compared to recent Federal Reserve communications has widened the policy divergence between the two central banks. Technical indicators suggest EUR/USD is consolidating near equilibrium levels, with traders monitoring for breakout signals. Cross-currency flows show EUR/GBP stability while EUR/PLN and EUR/HUF reflect ongoing Eastern European currency dynamics. Near-term resistance lies at recent highs, while support has formed at key moving averages. The combination of US credit uncertainties and steady European fundamentals could drive further euro gains if risk sentiment deteriorates.