EURUSD Market Outlook: EURUSD on the 4-hour frame continues to paint a picture of bearish dominance, though the descent is beginning to feel labored. Trading near 1.1602, the pair is entrenched in a well-defined downtrend characterized by a sequence of lower highs and lower lows. The most recent leg down from the 1.1750 area was particularly decisive, showcasing the underlying selling pressure that remains in this market. However, as price probes these lower depths, the momentum appears to be fragmenting. We’re not seeing the same explosive, gap-like candles to the downside; instead, the moves are becoming more choppy and overlapping.
This is the kind of behavior that suggests the trend, while still intact, may be ripe for a pause or a technical correction as the market becomes oversold. The immediate focus is on whether the current levels can spark a genuine bounce. The 1.1570-1.1580 zone is a critical juncture, representing a significant low from the past. A decisive break below this support would undoubtedly reinvigorate the bearish narrative, likely triggering a new wave of selling toward the 1.1520 area. Yet, the fading momentum on each new low makes me wary of adding to short positions here. Conversely, for any bullish reversal to gain credibility, the market must first stage a recovery that can push through the nearby resistance at 1.1640. A more significant test for any counter-trend move lies further up at 1.1680, a level that formerly provided support and now marks a key lower high. My mindset here is cautious. The path of least resistance is still down, but the risk of a sharp, short-covering rally grows with every hesitant tap at these lows. Im preparing for both scenarios: a breakdown to new lows for a continuation, or a bullish reversal signal off this key support to catch a corrective bounce.
