**EUR/USD Weekly Outlook: Bearish Pressures Ahead**
*Adapted and expanded from the original analysis by ActionForex.com*
The euro faced significant headwinds against the U.S. dollar over the past week, continuing its corrective decline that began earlier in April. Last week’s movements confirm resurgent bearish sentiment in the market, further cementing the greenback’s dominant stance amid ongoing global macroeconomic shifts and central bank policy divergence.
This weekly analysis explores the factors influencing the EUR/USD currency pair, detailing the current technical posture, macroeconomic drivers, pivotal support and resistance levels, and forward-looking expectations as informed by technical indicators and broader financial conditions.
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**Weekly Performance Overview**
– EUR/USD dropped for the third consecutive week.
– From a technical perspective, the pair continued its upward correction from the October 2023 low of 1.0447 and reached a short-term peak in December 2023 at 1.1138.
– Since then, downward momentum has taken over, punctuated by the latest bearish wave which points to more potential downside risks in the immediate term.
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**Key Support and Resistance Levels**
– Immediate Support: 1.0600
– Intermediate Support: 1.0523 (61.8 percent Fibonacci projection from 1.1138 to 1.0694, extended from 1.0980)
– Stronger Support: 1.0447 (October 2023 low)
– Resistance Zone: 1.0694
– Higher Resistance: 1.0795
– Key Technical Resistance: 1.0980 (recent peak from early February 2024)
The break below 1.0694 confirms that the rebound from the December low of 1.0694 to the February high of 1.0980 was a corrective structure, and not indicative of a sustainable bullish reversal.
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**Technical Indicators and Structure**
The weekly chart displays clear weakening momentum for EUR/USD, with the following developments:
– The pair broke under the 55-day Exponential Moving Average (EMA), which often signals a shift toward bearish control in medium-term scenarios.
– Momentum indicators such as RSI and MACD are displaying patterns consistent with increasing downside pressure.
– MACD on the daily chart is turning lower, suggesting acceleration in the downtrend.
– On the four-hour chart, the 55 EMA was repeatedly tested but sustained periods failed to reclaim key levels, reinforcing bearish resistance.
This pattern signals a likely continuation of the downward structure initiated from the pair’s yearly peak at 1.1138.
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**Elliott Wave Perspective**
From an Elliott Wave standpoint:
– The rise from 1.0447 to 1.0980 appears to be a completed corrective wave in a larger downtrend sequence.
– The subsequent fall from 1.0980 potentially marks the continuation of a larger impulse wave down.
– If current pressures hold, EUR/USD could be in the early stages of forming a third wave in a bearish impulse structure, which typically yields the most aggressive movements.
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**Fibonacci Projection Analysis**
Using Fibonacci projections to gauge potential targets:
– The move from 1.1138 to 1.0694 (first leg), followed by a recovery to 1.0980, gives a 61.8 percent projection target at 1.0523.
– This level has already been tested, with some intraweek movement breaching slightly below.
– Should this level fail to hold in the coming sessions, the next extension of concern is the 100 percent projection at 1.0536, closely followed by 1.0447, which marks the October 2023 trough.
The loss of this support cluster could open up further declines toward the 1.0350 region, where stronger historical support becomes relevant.
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**Macro Fundamental Backdrop**
Several macroeconomic factors continue to exert significant pressure on the eurozone currency:
– **Diverging Monetary Policy**
The Federal
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