Title: EUR/USD Temporarily Stabilizes Amid Bearish Pressure – In-depth Analysis
Original analysis by Economies.com
Date: September 17, 2025
Rewritten and expanded for clarity, depth, and additional perspective
The EUR/USD currency pair has found a brief moment of stability in its downward journey, entering a consolidation phase after recent bearish developments. While this truce offers some momentary relief for the euro, market signals point to the likely continuation of the negative trajectory.
The following analysis breaks down the current technical posture of EUR/USD, the factors influencing its price action, and the expectations for the short and medium-term outlook, using information based on the original article by Economies.com.
Market Overview and Context
The EUR/USD pair recently broke below a significant support level at 1.0700 before pausing its decline. The brief consolidation phase currently taking place is largely viewed as a corrective move—essentially, the market catching its breath—rather than the beginning of a reversal.
This compression phase has not yet been accompanied by significant bullish pressure, which suggests that bears may be preparing for another wave of downward movement. Expectations continue to lean toward the pair retesting key levels below.
Key Driving Factors
Several internal and external market forces are shaping the ongoing behavior of EUR/USD:
– A strong US dollar supported by hawkish Federal Reserve rhetoric and better-than-expected macroeconomic data
– Weak eurozone economic growth coupled with persistent inflation and lowered sentiment across the region
– Technical indicators on multiple timeframes all pointing toward continued bearish control
Technical Indicators and Signals
EUR/USD displayed strong bearish momentum over the last few sessions. Following a clear violation of the 1.0700 support level, the pair is now moving sideways, consolidating in what many analysts believe is a flag pattern that could precede another downward breakout.
Let’s break down the current technical picture:
Support and Resistance Levels:
– Immediate resistance: 1.0700, which now acts as a re-established technical ceiling
– Next resistance: 1.0735, aligning with the 50-period Exponential Moving Average (EMA) on the 4-hour chart
– Key support: 1.0620, which, if broken, opens the path toward the next major downside target
– Extended support: 1.0550, a level of historical significance previously tested in July and earlier in May 2023
Moving Averages:
– The 50-period EMA is currently positioned above the price, reinforcing bearish sentiment
– Momentum indicators such as the Relative Strength Index (RSI) remain below the neutral 50 level, suggesting sellers remain in control
Price Action Behavior:
– Current consolidation range is between 1.0660 and 1.0700
– Short wicks on recent candlesticks indicate low bullish volume and failed attempts to push the pair above resistance
Daily Chart Insights:
– Strong downward channel still intact, with price respecting the lower boundary
– No bullish divergence seen in oscillators, signaling little current probability of a reversal
Bearish Structure Still Dominant
While the pair is currently pausing, no meaningful technical evidence yet suggests buyers have reclaimed any control. Every sign points to this being a corrective pullback rather than the beginning of a trend change. The dominant structure on the larger timeframes remains bearish.
Reasons the Bearish Trend May Continue:
– Stronger dollar supported by Fed’s rate outlook compared to ECB’s more cautious stance
– Divergence in economic momentum: The US economy continues to show resilience, while the eurozone struggles with stagnation
– Inflationary pressures in the US that could lead to further monetary tightening
Short-Term Expectations
In light of the prevailing fundamentals and technical indicators, the market appears likely to continue in its downward trajectory. However, we may first see slight upticks toward the nearest resistance, particularly if US data releases show mixed results this week.
Short-Term Forecast Based on Analysis:
– If the pair fails to break above
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