FX.co ★ Jackroay | EUR/USD

I am analyzing the EUR/USD daily chart and I can clearly see that the pair completed a full five-wave bearish cycle that began forming at the end of January, with sellers maintaining control throughout most of the decline. I noticed that the weekly MACD had been warning about this scenario for quite a long time because the large bearish divergence was impossible to ignore, and eventually the market fully respected that signal. I observed how the price managed to break below the important 1.1470 low during the fifth wave, while at the same time the CCI indicator started forming a bullish divergence, which immediately caught my attention as an early indication that bearish momentum was beginning to weaken. I believed that after such an extended downward cycle, it was logical to start searching for buying opportunities below the previous low because the market was entering a strong reversal zone. I saw that the upward movement did not begin instantly, but I also noticed that buyers gradually absorbed selling pressure and eventually pushed the pair through every important resistance level on the way higher. I observed several temporary pullbacks from descending trend lines, yet I still expected the market to at least retest the high of the fourth wave, and finally the bullish rally gained enough strength to continue higher. I think the stabilization of the Iranian conflict at that time also supported risk appetite and indirectly helped the euro recover against the dollar. I applied a Fibonacci retracement grid across the entire bearish cycle, and I saw that the market reacted very accurately around the 50 percent retracement level near the top of the fourth wave, which strengthened my confidence in the bullish recovery target. I also noticed that the rally extended toward the strong resistance area around 1.1762, which aligned closely with the 61.8 Fibonacci retracement level and also matched the upper boundary of the weekly trend structure. I considered that area the best medium-term selling opportunity because I believe the market has a high probability of forming a new weekly bearish wave targeting the 1.1300–1.1400 zone. I saw that the price later reached support near 1.1667 on the daily chart and reacted with a rebound, but I still believe this movement is only a corrective pullback within a larger bearish structure. I think the market is currently at the beginning of the third bearish wave on the weekly timeframe, and I can already identify the first and second waves clearly on the daily chart. I believe the breakout below support confirmed the activation of the third wave, and I expect this bearish cycle to eventually continue below the March low. I also calculated that the minimum bearish objective based on the Fibonacci expansion of the first wave has already been achieved near the 161.8 extension level, although I still believe additional downside remains possible after the current consolidation phase ends. I noticed that the H4 chart showed bullish divergence and some potential for temporary growth, possibly even above the nearest high, but I still consider buying against a developing third wave extremely risky because higher timeframe momentum remains bearish. I think the recent upward movement may continue briefly, but I believe the probability of a sustained bullish continuation remains limited while the dominant daily and weekly bearish wave structure stays intact.

I am analyzing the EUR/USD currency pair after Wednesday’s close at 1.1626, and I can see that the hourly chart continues to maintain a bullish structure despite the presence of strong higher timeframe resistance zones. I have identified several upside objectives using the Fibonacci expansion tool, and I currently see the first major target at the 161.8 Fibonacci extension near 1.1709, which I consider the most realistic and statistically reliable objective in the current market structure. I also recognize that if bullish momentum strengthens further, the second Fibonacci target at 1.1789 could become active, while the extended 423.6 Fibonacci projection near 1.1918 represents a much more aggressive bullish scenario that would likely require exceptionally strong momentum and favorable macroeconomic conditions. I have decided to prepare for a potential reversal rather than chase the upward movement because I believe the pair is approaching a technically overextended zone where profit-taking from buyers could begin to increase significantly. I plan to initiate my first sell position around 1.1700 because I consider this area an attractive resistance zone that may trigger a bearish reaction or at least a temporary correction. I also intend to strengthen my selling exposure near 1.1800 if the market continues to rise because I believe that area could become a powerful medium-term supply zone aligned with broader resistance on the higher timeframes. I understand that entering against bullish momentum carries risks, but I am relying on the expectation that the current upward movement may eventually lose strength near these Fibonacci resistance levels. I believe the key invalidation point for the bullish scenario is the support level at 1.1579 because a confirmed breakout below this area would significantly weaken buyer control and shift market sentiment back toward bearish continuation. I expect that once 1.1579 is broken, the current upside projections will lose relevance and new downside targets will begin forming based on the developing bearish wave structure. I have also reviewed today’s economic calendar and I notice that there are no major European Union releases capable of creating strong volatility during the European trading session. However, I am paying close attention to the upcoming high-impact US economic releases scheduled for this evening because I expect these three-star events to generate sharp price fluctuations and potentially determine whether EUR/USD continues climbing toward resistance or reverses lower from the current structure. I believe volatility will increase substantially during the US session, and I think traders should remain cautious with position sizing because rapid movements around major economic releases can easily trigger both breakout rallies and aggressive reversals within a short period of time.