EUR/USD: Bearish Pressure Building as Euro Tests Key Support

EUR/USD closed at 1.0901, after reaching an intraday high of 1.0947 and a low of 1.0861. The pair continues to trade near multi-week lows, with the recent price action suggesting sustained downside momentum as the US dollar strengthens across the board.

Key Technical Observations

Bearish Moving Average Alignment: The 15-day moving average (1.0761) has crossed below the 20-day moving average (1.0692), reflecting building downside pressure. Price action remains beneath both averages, which are turning lower — confirming bearish control in the near term.

Trend Structure: The pair has transitioned from a range-bound consolidation into a soft downtrend. The inability to hold above the 1.1000 level has invited further selling pressure, with bears now targeting the 1.0850–1.0800 zone. A decisive close below 1.0850 would expose deeper support near 1.0700 — a level aligned with March’s breakout base.

RSI Momentum: The RSI at 40.02 continues to drift lower without reaching oversold territory, signalling ongoing bearish momentum with room for further weakness. Momentum indicators suggest that sellers remain in control while buyers are largely absent.

Price Behaviour: Candlestick structure reveals consistent lower highs and lower closes, reflecting controlled selling rather than panic liquidation. This slow grind lower often precedes either a final flush toward key support or a brief corrective bounce.

Macro & Market Context

US Dollar Resurgence: The dollar’s rebound, fuelled by firmer U.S. Treasury yields and robust economic data, has reasserted downside pressure on the pair. The Fed’s messaging of “higher-for-longer” rates continues to contrast with the European Central Bank’s softer tone.

ECB Policy Outlook: Eurozone inflation has eased, supporting expectations that the ECB will lean more dovish compared to the Fed. This divergence in policy paths continues to weigh on the euro’s yield appeal.

Risk Sentiment: While global equity markets remain relatively stable, European growth concerns persist, further undermining demand for the euro.

Key Levels to Watch

• Immediate Resistance: 1.0950 – near-term pivot, aligning with the 15-day moving average.
• Next Resistance: 1.1050 – upper consolidation barrier and former breakdown point.
• Immediate Support: 1.0850 – short-term support level.
• Deeper Support: 1.0700 – key structural base and potential test point for sellers.

Bias: Bearish

The short-term outlook remains bearish while the pair trades below 1.0950. Sustained weakness below 1.0850 could open the way for 1.0700, while a recovery above 1.1000 would be needed to neutralize the current downside bias.

Key Takeaways

• Favor sell-on-rally setups toward 1.0950, targeting 1.0850–1.0700.
• Maintain stops above 1.1050 to manage risk in the event of a sharp correction.
• Momentum indicators suggest limited upside, but oversold conditions could trigger short-term bounces.