EUR/USD As the forex market remains closed over the weekend with traders preparing for Monday’s opening bell, the EUR/USD daily chart presents a compelling technical setup, hovering precisely at a critical structural demand zone following a prolonged multi-week selloff. Fundamentally, the Euro has been under continuous downward pressure as monetary policy divergence between the European Central Bank and the Federal Reserve weighs heavily on sentiment; ongoing dollar strength, driven by persistent US economic resilience and cautious central bank rate expectations, has dominated market flows, driving the exchange rate straight down to test the major horizontal support band highlighted in blue between 1.1370 and 1.1435. Looking at the daily price structure, price action closed the week at 1.1391, sitting deeply inside this primary support corridor which historically triggered major bullish rebounds back in late 2025 and mid-2026. The pair is currently trading well below both the fast red moving average and the green 200-period moving average near 1.1630, confirming that the broader trend remains decidedly bearish, yet the arrival at this blue demand zone opens the door for a high-probability technical bounce or stabilization phase as market liquidity resets on Monday. Examining the momentum oscillators across the lower panel, technical indicators are screaming heavily oversold conditions across the daily timeframe, reinforcing the likelihood of a bullish relief rally. The Relative Strength Index (RSI) is hovering at 28, deeply entrenched within extreme oversold territory below the 30 threshold, which signals that downside momentum is becoming severely stretched and due for a mean-reversion move. Simultaneously, the Stochastic oscillator has dipped to 15.28 with its signal lines converging near the 12.75 oversold boundary, preparing for a potential bullish crossover upon market opening. Meanwhile, the MACD histogram remains negative at -0.00475 beneath its zero line, reflecting the overarching momentum shift, but the rate of downside acceleration is beginning to flatten out as price hits the 1.1370 floor. Translating this dual fundamental and technical layout into an actionable trading plan for Monday's session, I am closely watching two distinct scenarios around the blue 1.1370–1.1435 support range. For a bullish reversal setup, I am eyeing long entry opportunities inside the 1.1370 to 1.1390 zone upon seeing intraday confirmation such as a bullish rejection tail or hourly candle breakout above 1.1435. Taking a buy trade here sets a primary upside target at 1.1500, with an extended target reaching toward the broken moving average resistance near 1.1565 and 1.1630. Protective stop-loss orders must be placed strictly below the absolute floor of the support zone around 1.1305 to limit risk against unexpected weekend news gaps. Conversely, if Monday's liquidity brings aggressive selling that forces a daily candle close beneath the key 1.1305 handle, it would completely invalidate this bullish bounce thesis, opening the floodgates for a deeper structural decline toward 1.1200. Remaining disciplined and waiting for price action to confirm buyers' defense of this blue support level at Monday’s open remains my primary strategy.
