EUR/USD 4-Hour Timeframe AnalysisEUR/USD 4-Hour Timeframe Analysis
EUR/USD has shown bullish momentum in the past few weeks, primarily driven by the ECB's recent rate cut of 25 basis points to 2.5% and its move toward normalizing monetary policy as inflation nears target levels. However, price action has shifted, displaying lower highs and lower lows, indicating increasing selling pressure.
We have identified a minor key resistance level at 1.08300, where a breakout could reignite buying momentum. Meanwhile, a major key support at 1.07700 has been broken, signaling a Change of Character (CHOCH) and a potential bearish shift. Currently, price is accumulating, suggesting a possible liquidity hunt before the next major move.
Outlook and Key Technical Levels
🔹 Minor Key Resistance: 1.08300 (breakout point for bulls)
🔹 Sell Limit Entry: 1.07650 (pending order)
🔹 Stop Loss (SL): 1.08270 (above liquidity zone)
🔹 Take Profit (TP): 1.06280 (next minor support)
Our strategy is to wait for a 4-hour candle close below 1.07700 before executing a sell limit order at 1.07650. This confirmation increases the probability of further downside movement.
Fundamental Insight and Market Sentiment
Recent developments suggest EUR weakness, aligning with our technical outlook:
📉 ECB Policy Shift: The rate cut, while initially bullish, may contribute to euro softness as markets adjust to a more accommodative stance.
📉 Trade War Tensions: The U.S. imposing tariffs on European imports has pressured the euro, pushing EUR/USD toward 1.0733 before a slight recovery.
📉 USD Strength: The U.S. dollar index (DXY) has climbed to 103.88, as the Federal Reserve remains cautious about rate cuts, maintaining USD strength.
The combination of technical breakdowns and fundamental euro weakness supports a bearish bias on EUR/USD. We remain patient, monitoring liquidity formation before executing our trade.
📌 Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.
