EURUSD Price Analysis: Bearish Breakdown to 1.15 and 1.14 in Sight
Muhammad Faraz 
EURUSD Price Analysis Bearish Breakdown to 1.15 and 1.14 in Sight
The EURUSD’s price has been consolidating and facing repeated rejection near a formidable resistance zone clustered around 1.1627. This price action, following a prior downtrend, suggests a bearish bias is forming as buyers struggle to gain control. Our analysis projects a resumption of the downtrend towards a primary target of 1.1500, with a more ambitious secondary target at 1.1400. This prediction is based on a confluence of technical factors, primarily the strength of the current resistance zone and its alignment with key Fibonacci retracement levels.
Current Market Structure and Price Action
The broader market structure for the EURUSD remains bearish, characterized by a series of lower highs and lower lows. The price is currently interacting with a strong and technically significant resistance zone. Recent price action shows a clear struggle for bulls to push the price sustainably above the 1.1627 level, indicating seller dominance and a high probability of a bearish breakdown from this consolidation. The compression of prices in this zone suggests an imminent volatile move is likely.
Identification of the Key Resistance Zone
The most critical technical element is the Strong Resistance Zone between approximately 1.1627 and 1.1750. The strength of this zone is derived from:
- Historical Significance: Multiple key price points, including 1.1750, 1.1700, and 1.1650, have previously acted as major swing highs and consolidation areas, creating a dense layer of overhead supply.
- Technical Confluence: The current battleground at 1.1627 is further reinforced by the presence of Fibonacci retracement levels (30.16% and 24.47%), adding significant weight to its importance.
- Market Psychology: This multi-faceted zone represents a point where the sentiment of sellers is likely to overpower buyers. Traders who missed earlier selling opportunities or are looking to enter short positions see this rally as an attractive level to act.
This powerful confluence makes it a high-probability level for a bearish reaction.
Technical Target(s) and Rationale
Our analysis identifies the following price targets, with a bearish prediction:
- Primary Target (PT1): 1.1500
- Rationale: This level represents a major psychological round number and a previous swing low where some buying interest may initially emerge. It is the first logical target following a break below the current consolidation support.
- Secondary Target (PT2): 1.1400
- Rationale: This is a more ambitious target, acting as a stronger historical support zone and the next key psychological level. A break below 1.1500 would likely accelerate selling momentum towards this area.
Prediction: We forecast that the price will be rejected from the current resistance zone, break below the immediate support near 1.1550, and move decisively towards PT1 at 1.1500. A sustained bearish momentum below that level would then open the path towards PT2 at 1.1400.
Risk Management Considerations
A professional strategy is defined by its risk management.
- Invalidation Level (Stop-Loss): The entire bearish thesis is invalidated if the price achieves a sustained daily close above the 1.1750 resistance level. This price point represents a clear break of the immediate resistance structure and would signal a potential reversal of the broader downtrend, negating the current bearish outlook.
- Position Sizing: Any short positions taken should be sized so that a loss triggered at the invalidation level above 1.1750 represents a small, pre-defined percentage of your total capital (e.g., 1-2%).
Fundamental Backdrop
The technical setup is framed by the current fundamental landscape:
- Central Bank Policy Divergence: The monetary policy outlook for the US Federal Reserve (hawkish hold) versus the European Central Bank (dovish potential) continues to be a primary driver, providing a fundamental tailwind for the US Dollar.
- Macroeconomic Resilience: Relative economic strength and safe-haven flows into the US economy continue to bolster the USD against its major counterparts.
- Geopolitical Risk: Ongoing global tensions contribute to USD strength, which inherently pressures the EURUSD pair.
These factors contribute to the bearish sentiment surrounding the EURUSD.
Conclusion
The EURUSD is at a critical technical inflection point, compressed beneath a formidable resistance zone. The weight of technical evidence, including historical price levels and Fibonacci confluence, suggests a bearish resolution is the path of least resistance, targeting a move first to 1.1500 and potentially extending to 1.1400. Traders should monitor for a confirmed breakdown below 1.1550 and manage risk diligently by respecting the key invalidation level above 1.1750. The reaction at the 1.1500 target will be crucial for determining whether the bearish move will extend further.
Chart Source: TradingView
Disclaimer: This analysis is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. All trading and investing involves significant risk, including the possible loss of your entire investment. Always conduct your own research (DYOR) and consider seeking advice from an independent financial professional before making any trading decisions.
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