EUR/USD Technical Analysis: Bearish Momentum Persists

The EUR/USD pair continues to trade within a bearish impulse that originated on April 17. Despite four weeks of minor consolidation, bulls have failed to regain significant momentum, and a recent liquidity sweep suggests the potential for a renewed decline. The primary downside objective for the bears is the recent swing low at 1.1325, a level that may attract institutional interest and potentially trigger a liquidity-driven bounce.

Fundamental Context and Market Sentiment

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The current strength of the bearish trend remains difficult to justify via conventional fundamental analysis. Neither the ECB’s decision to maintain current monetary policy nor the uncertainty surrounding FOMC rate hikes have acted as catalysts for a euro-denominated rally. Market participants appear to be largely ignoring macroeconomic data, suggesting that bullish sentiment is currently absent, regardless of inflationary trends or labor market fluctuations.

Geopolitical Factors and Technical Structure

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While geopolitical tensions—specifically involving developments in the Middle East and Iranian trade policy—have intensified, their impact on the USD remains muted. The lack of a strong reaction to these events highlights a disconnect between headlines and currency price action. Technically, the bearish imbalance established on April 17 remains unfilled, keeping the bearish outlook intact in the absence of actionable bullish reversal patterns.

Trading Outlook and Technical Levels

The market has effectively moved sideways over the past month, failing to form clear bullish chart patterns. While historical liquidity sweeps from the August 1 and July 2 levels provide bears with technical justification for continued pressure, there are currently no strong bearish indicators to confirm an immediate extension. Consequently, the lack of confirmation makes new positions risky for both sides.

Economic Calendar and Conclusion

Market focus on the July 27 economic calendar, including the ADP Employment Change and Consumer Confidence Index, is expected to remain minimal. Investors continue to overlook economic releases, reinforcing the current trend of low-conviction price action. Given the absence of clear technical signals or bullish momentum, a cautious approach is advised until a defined market structure emerges near key support or resistance zones.

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