Since the beginning of May, 2025, the EURUSD pair has been bearish
Technical Analysis:
The pair is approaching a significant resistance/demand zone near 1.12430.
The level at 1.11755 is a LTF support zone that could hold short term.
The daily chart is finding resistance on the 25 EMA and the 1H is trading below the 200 EMA suggesting continued bearish price movement.
Wyckoff Method Perspective:
Distribution Phase: The recent price action suggests a possible re-distribution phase.
Spring Test: We haven't seen this happen yet however signs indicate a potential spring could happen with the evident liquidity pool and supply feed.
Fundamental Factors:
The U.S. dollar has been weakening recently due to:
Trade Tariffs and Tensions: New tariffs on Canadian, Mexican, and Chinese goods have disrupted trade, reducing demand for the dollar.
Inflation Fears: Uncertainty about inflation has eroded confidence in the dollar's value.
Federal Reserve Policy: Expectations of looser monetary policy or slower tightening have pressured the dollar.
De-dollarization Trends: Some countries are reducing reliance on the dollar, favoring other currencies or gold-backed alternatives.
Economic Slowdown Signals: Data suggesting a slowing U.S. economy, partly due to tariff impacts, has weakened investor confidence.
Trade Deficit: A growing U.S. trade deficit, now significantly larger, has further strained the dollar.
These factors have combined to drive a sharp decline, with the dollar hitting its worst month in years.
Conclusion:
I will be looking to short EURUSD until the trend reverses. Possible long term shorts may be on the horizon.
Technical Analysis:
The pair is approaching a significant resistance/demand zone near 1.12430.
The level at 1.11755 is a LTF support zone that could hold short term.
The daily chart is finding resistance on the 25 EMA and the 1H is trading below the 200 EMA suggesting continued bearish price movement.
Wyckoff Method Perspective:
Distribution Phase: The recent price action suggests a possible re-distribution phase.
Spring Test: We haven't seen this happen yet however signs indicate a potential spring could happen with the evident liquidity pool and supply feed.
Fundamental Factors:
The U.S. dollar has been weakening recently due to:
Trade Tariffs and Tensions: New tariffs on Canadian, Mexican, and Chinese goods have disrupted trade, reducing demand for the dollar.
Inflation Fears: Uncertainty about inflation has eroded confidence in the dollar's value.
Federal Reserve Policy: Expectations of looser monetary policy or slower tightening have pressured the dollar.
De-dollarization Trends: Some countries are reducing reliance on the dollar, favoring other currencies or gold-backed alternatives.
Economic Slowdown Signals: Data suggesting a slowing U.S. economy, partly due to tariff impacts, has weakened investor confidence.
Trade Deficit: A growing U.S. trade deficit, now significantly larger, has further strained the dollar.
These factors have combined to drive a sharp decline, with the dollar hitting its worst month in years.
Conclusion:
I will be looking to short EURUSD until the trend reverses. Possible long term shorts may be on the horizon.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.