EUR/USD Technical Analysis: Bearish Momentum Persists

EUR/USD Technical Outlook

The EUR/USD currency pair maintained its downward trajectory throughout Tuesday, settling below the 100.0% Fibonacci retracement level of 1.1409. Current technical indicators suggest the bearish trend may extend toward the 127.2% Fibonacci level at 1.1291. A reversal in sentiment would require a daily close above 1.1409, which could signal a moderate recovery toward the 76.4% level at 1.1514.

Wave Structure and Market Sentiment

Would you like to read more good news about EUR/USD, Euro, and Continues?

The hourly chart continues to reflect a bearish wave structure, characterized by the latest downward wave breaching previous lows. Despite recent geopolitical improvements, the market appears indifferent to positive developments, with the US Dollar retaining strength following recent Federal Reserve rhetoric. The lack of buying pressure suggests that the bears remain in control, even in the absence of significant catalysts.

Protect profits effectively with the smart Trailing Stop Expert Advisor. See it in action.

Economic Backdrop and Data

Tuesday's session was marked by weak business activity data for both Germany and the Eurozone, further weighing on the Euro. Additionally, comments from Christine Lagarde regarding monetary policy, which stopped short of a firm commitment to tightening, contributed to the currency's decline. While current news flow may not fully justify the extent of the sell-off, the Euro is currently failing to hold support against bearish sentiment.

4-Hour Chart and Indicator Analysis

On the 4-hour timeframe, consolidation below the 1.1411 Fibonacci level reinforces the bearish outlook. While a bullish divergence is emerging on the CCI indicator, it currently serves only as a potential signal rather than an established reversal. Market participants continue to overlook counterarguments, prioritizing the ongoing downward trend.

COT Report and Long-Term Positioning

Recent Commitments of Traders (COT) data indicates that institutional investors maintain a net-long position, with 228,000 long contracts compared to 193,000 shorts. Despite this long-term optimism, short-term price action remains disconnected from these fundamental holdings. The market has largely ignored geopolitical stabilization in the Middle East, which has historically been a factor for Euro support.

Trading Strategy and Key Levels

The economic calendar for June 24 includes the German Ifo Business Climate Index and US New Home Sales, though neither is expected to trigger significant market volatility. Traders currently holding short positions targeting 1.1291 may consider maintaining these trades. Long positions remain speculative and are only advised following a firm hourly close above 1.1409, with an initial target of 1.1514.

Thank you for reading. Level up your trading with proven RobotFX expert advisors – check them out now.