Good afternoon. I hope you're starting the week with enthusiasm and that today's trading activity goes smoothly. I'd like to add to this journal and share my views on the EUR/USD currency pair. My analysis focuses on identifying trend direction using Moving Averages and Bollinger Bands, combined with MACD to help filter momentum and identify overbought and oversold conditions.
Looking at the daily timeframe, last week the price actually broke through a key support level in the 1,141 area. However, this breakout was not immediately followed by a continued decline due to emerging buying pressure, which caused the price to correct upwards for approximately three days before retesting the breakout area. Prior to the breakdown, the price also formed a Drop-Base-Drop pattern, indicating a nearby supply zone. Therefore, the 1,141 area has now transformed into a resistance area and become an attractive area to seek selling opportunities in line with the main trend. Overall, the EUR/USD major trend remains bearish. This is evident from the price still moving below the Middle Bollinger Band and the 50-day Moving Average, indicating that selling pressure remains dominant. Indeed, the MACD indicator is currently starting to show an attempt to move above the signal line, which could open the opportunity for a higher correction. However, as long as the downtrend structure remains unbroken and the price remains below the resistance area, the correction is still considered a retracement within the ongoing downtrend. Currently, the price is trading around 1,140 and has tested the supply area for the second time. In the previous test, the price experienced rejection, dropping to the 1.138 area, although it subsequently rebounded. However, the price has yet to break through the 50-day Moving Average, so bearish pressure is considered to remain quite consistent. Given these conditions, this area is still worth considering as a re-entry sell zone for trend-following traders. In conclusion, although there is currently buying pressure triggering an upward correction, the overall trend structure still indicates bearish dominance. Therefore, my trading plan remains focused on selling opportunities around the 1.142 area, with a downside target towards 1.132 and a risk limit (stop-loss) at 1.146. As long as the price cannot convincingly break through this resistance, the potential for a decline is still considered greater than the potential for an increase.
