Original Article Credit: “EUR/USD Daily Outlook” by ActionForex.com
EUR/USD Technical Outlook – Expanded Analysis and Market Update
The EUR/USD pair faces downward pressure as the latest price action suggests continuation of bearish momentum despite recent attempts at recovery. As of now, the current trend is leaning in favor of the US Dollar, following stronger US economic indicators and relatively cautious signals from the European Central Bank (ECB). This detailed analysis further explores the EUR/USD outlook, taking into account technical indicators, fundamental setups, and potential scenarios for both bullish and bearish outcomes.
Current Price Overview
At the time of analysis, EUR/USD is trading slightly below the 1.0700 level, reflecting a subdued momentum after failing to break meaningful resistance areas in previous sessions. The bearish tone is supported by a combination of technical breakdowns and macroeconomic divergence between the United States and the Eurozone.
Key Technical Indicators
– Short-Term Trend: Bearish, with price failing to hold above the 55-day Exponential Moving Average (EMA)
– Long-Term Trend: Neutral to bearish depending on whether 1.0650 breaks convincingly
– RSI: Positioned below 50, indicating momentum is in favor of sellers
– MACD: Negative divergence growing, suggesting a waning bullish attempt
– Support Levels:
– Immediate: 1.0694 (prior short-term low)
– Key: 1.0600–1.0635 (next fib retracement and round number)
– Resistance Levels:
– Immediate: 1.0800
– Key: 1.0894 (recent high)
Short-Term Outlook
Immediate outlook remains bearish as price struggles to reclaim the 1.0800–1.0850 resistance area. The downtrend is gaining strength following a series of lower highs and lower lows formed over the past two weeks.
Key observations:
– Price failed to sustain a rebound after hitting a minor low near 1.0694
– Bullish momentum remains limited, and any bounce appears corrective rather than trend changing
– A downside break below 1.0694 confirms resumption of the broader decline from the 1.1138 peak
If 1.0694 is broken decisively, traders will likely target the 1.0600 to 1.0635 region, which holds psychological significance and coincides with Fibonacci retracement levels drawn from the October low at 1.0447 to the December high at 1.1138.
Conversely, a rebound above current levels requires validation through a firm move above minor resistance near 1.0800. Such a move could open the path back toward the 1.0894 high, which remains critical for any trend reversal.
Medium-Term Outlook
The EUR/USD has been consolidating between 1.0600 and 1.0900 for several months, reflecting a lack of clear medium-term direction. However, price action is leaning toward bears due to:
– Persistent weaker economic signals from the Eurozone, including subdued inflation and GDP growth forecasts
– Diverging monetary policy trajectories, with the Federal Reserve maintaining a higher-for-longer interest rate stance
– ECB’s cautious tone, signaling no imminent rate hikes and potential for policy easing if macro conditions worsen
The structure indicates that the pair is likely forming a descending triangle on longer time horizons with lower highs and stable support near the 1.0600 zone, hinting at a potential breakdown if the pressure persists.
Long-Term Projection and Elliott Wave Structure
Analyzing the price using Elliott Wave Theory suggests that the broader upward recovery from the October 2023 low of 1.0447 may have completed at 1.1138 in December. From there, the recent fall can be viewed as part of a corrective wave structure, possibly a C-wave in a larger ABC correction.
Under this hypothesis:
– Wave A: Rally from 1.0447 to 1.1138 (completed)
– Wave B
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