EUR/USD 5M Analysis
The EUR/USD pair continued its downward move on Thursday and tested the 1.1362–1.1368 support area more convincingly. Theoretically, this zone can stop the euro's uncontrolled fall, but we fully understand that if the market continues buying the dollar as it has over the past three weeks, no support area will halt the decline. The market continues to ignore fundamental, geopolitical, and macroeconomic factors. Just this week, fairly decent eurozone PMIs were released that the market barely noticed. What it did notice were speeches by FOMC members, most of whom confirmed intentions to continue tightening policy. So formal reasons for dollar strength existed, but the market's ignoring a large number of positive factors for the euro must also be acknowledged. Trading the pair should be somewhat easier today because a clear support area exists. A rebound from it is a correction; consolidation below it is a new drop.
Technically, the downward trend continues to form. The market keeps pricing in future Federal Reserve rate hikes, which already looks simply absurd. The trend line remains relevant, and price is below the Ichimoku lines, so technically the pair's decline is fully justified — but only on the hourly timeframe.
On the 5-minute TF on Thursday, there were four rebounds from the 1.1362–1.1368 area, yet there is no confidence in an upside move on Friday. We still note that the euro cannot even correct at this time. That means there are no buyers in the market.
COT Report
The latest COT report is dated September 15. On the weekly timeframe, it is clear that non-commercial traders' net position remains bearish and has fallen sharply in 2026 amid geopolitical events. Traders have been reducing euro exposure in favor of the US dollar over the past six months. Trump's policy has not changed, but the dollar acted as a reserve currency for a period.
However, we still do not see fundamental factors for further USD strength. The Middle East war made the dollar temporarily super-attractive, but when that factor's "shelf life" expires, everything should return to normal — and that shelf life may already have expired. In the long term, the euro could fall as low as $1.08 (trend line), but the long-term uptrend remains intact. During recent months of dollar strength, the pair has not come close to that trend line.
The placement of the red and blue indicator lines indicates approximate parity between bulls and bears. During the last reporting week, long positions in the "Non-commercial" group rose by 10,500 contracts while shorts fell by 5,100. Accordingly, the net position increased by 15,600 contracts for the week.
EUR/USD 1H Analysis
On the hourly timeframe, EUR/USD continues to form a downward trend, and the Fed has strongly contributed to the southbound move. The European Central Bank should have supported the euro by raising rates for the second time in 2026, but the market now sees only the Fed and its tightening. Thus, the dollar has effectively formed an entire trend out of nowhere, and market sentiment may remain "bearish."
For September 25 we highlight the following levels for trading — 1.1234, 1.1274, 1.1362–1.1368, 1.1461–1.1473, 1.1536–1.1542, 1.1585, 1.1657–1.1665, 1.1750–1.1760, as well as the Senkou Span B line (1.1555) and the Kijun-sen (1.1428). The Ichimoku indicator lines may shift during the day, which should be taken into account when determining trading signals. Don't forget to move the Stop Loss to breakeven if the price moves 15 pips in the correct direction. This will protect against possible losses if the signal proves false.
On Friday, Germany will publish the consumer confidence index, the US will release the durable goods orders report, and no important events are scheduled in the eurozone. The US orders report is considered important, but not in the current circumstances. We do not expect a strong market reaction to it.
Trading Recommendations:
Today, traders can open new short positions targeting 1.1274 if price consolidates below the 1.1362–1.1368 area. Consider long positions on a rebound from the 1.1362–1.1368 area, targeting 1.1428 and 1.1461–1.1473.
Explanations for Illustrations:
Support and resistance price levels are thick red lines where movement may conclude. They are not sources of trading signals.
The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
Extreme levels are thin red lines from which the price has previously rebounded. They are sources of trading signals.
Yellow lines indicate trend lines, trending channels, and any other technical patterns.
Indicator 1 on COT charts shows the size of the net position of each category of traders.
