This EUR/USD Daily Chart shows a potential sell setup, built around technical resistance, Fibonacci levels, and macroeconomic expectations for the Eurozone.
1. Key Technical Elements:
Resistance Zone (1.16311):
The blue rectangle marks a strong resistance level, where price previously reversed. It aligns with the 100% Fibonacci extension level from the previous swing, indicating exhaustion of bullish momentum.
“Watch Price Action for Sell”:
A label warns traders to watch for bearish confirmation signals in this area (e.g., rejection candles, bearish engulfing, divergence, or volume drop).
Bearish Projection Path:
Two downward arrows suggest a potential multi-leg decline, starting with:
Target 1: 1.10797 (38.2% Fib level)
Target 2: 1.01766 (previous low, 100% measured move)
Volume Analysis:
Volume shows a decline at the highs, hinting at weak buying interest near resistance.
2. Fundamental Narrative: ECB Dovish Shift
🏦 ECB Rate Cuts Expected:
The European Central Bank (ECB) cut rates in June 2025, and further cuts are anticipated as economic momentum slows.
The ECB signalled a gradual policy easing path to stimulate growth, especially with core inflation falling.
📉 Inflation Trends:
Eurozone inflation has recently dropped below the 2% target, reducing pressure on the ECB to maintain restrictive monetary policy.
Lower inflation + dovish guidance = bearish for the euro, as rate differentials with the Fed may widen again.
🇺🇸 U.S. Outlook:
The Fed remains cautious with cuts due to sticky services inflation and strong labour data.
This divergence in central bank policy favours the USD over the EUR.
Trade Setup Summary:
Element Details
Entry Zone 1.1600 – 1.1630
Confirmation Bearish candlestick pattern or rejection at resistance
Target 1 1.1080 (short-term support, 38.2% Fib)
Target 2 1.0177 (previous low, full correction)
Risk Stop above 1.1650 zone (invalidates setup)
✅ Conclusion:
This setup aligns technical resistance with bearish fundamentals, making EUR/USD ripe for a potential medium-term downtrend. Keep an eye on ECB commentary, inflation updates, and U.S. macro data for validation.
1. Key Technical Elements:
Resistance Zone (1.16311):
The blue rectangle marks a strong resistance level, where price previously reversed. It aligns with the 100% Fibonacci extension level from the previous swing, indicating exhaustion of bullish momentum.
“Watch Price Action for Sell”:
A label warns traders to watch for bearish confirmation signals in this area (e.g., rejection candles, bearish engulfing, divergence, or volume drop).
Bearish Projection Path:
Two downward arrows suggest a potential multi-leg decline, starting with:
Target 1: 1.10797 (38.2% Fib level)
Target 2: 1.01766 (previous low, 100% measured move)
Volume Analysis:
Volume shows a decline at the highs, hinting at weak buying interest near resistance.
2. Fundamental Narrative: ECB Dovish Shift
🏦 ECB Rate Cuts Expected:
The European Central Bank (ECB) cut rates in June 2025, and further cuts are anticipated as economic momentum slows.
The ECB signalled a gradual policy easing path to stimulate growth, especially with core inflation falling.
📉 Inflation Trends:
Eurozone inflation has recently dropped below the 2% target, reducing pressure on the ECB to maintain restrictive monetary policy.
Lower inflation + dovish guidance = bearish for the euro, as rate differentials with the Fed may widen again.
🇺🇸 U.S. Outlook:
The Fed remains cautious with cuts due to sticky services inflation and strong labour data.
This divergence in central bank policy favours the USD over the EUR.
Trade Setup Summary:
Element Details
Entry Zone 1.1600 – 1.1630
Confirmation Bearish candlestick pattern or rejection at resistance
Target 1 1.1080 (short-term support, 38.2% Fib)
Target 2 1.0177 (previous low, full correction)
Risk Stop above 1.1650 zone (invalidates setup)
✅ Conclusion:
This setup aligns technical resistance with bearish fundamentals, making EUR/USD ripe for a potential medium-term downtrend. Keep an eye on ECB commentary, inflation updates, and U.S. macro data for validation.
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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.
For Training visit.
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
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.