FX.co ★ hamforexh | EUR/USD

EURUSD H4 Technical Analysis Looking at the EURUSD on the four-hour timeframe, the pair is currently trading at 1.1693, which essentially reflects a state of indecision and consolidation following a significant bearish reversal. The most striking feature on this chart is the clear rejection from the highs around 1.1855, where we saw a massive bearish engulfing candle form around April 17th. That single candle marked a decisive shift in market sentiment, erasing the prior bullish momentum and initiating a sustained downtrend that has since pushed price down by over 160 pips. What is particularly telling is how price has struggled to reclaim any meaningful ground above the 1.1785 level, which now acts as a formidable resistance zone reinforced by the confluence of the red and blue moving averages. The failure to break back above this area on multiple attempts suggests that sellers remain firmly in control, and any rallies are being treated as opportunities to short rather than signals of a genuine reversal. The moving average structure on this chart paints a bearish picture that is hard to ignore. The red fast moving average has crossed below the slower blue and orange averages, forming a classic bearish alignment that typically signals the beginning of a sustained downward phase. Price is currently hovering just above the 1.1680 support level, but it is doing so beneath all three major moving averages, which is a textbook bearish configuration. The green line, likely representing a momentum or volatility indicator, spiked dramatically during the initial rally but has since collapsed and flattened out, indicating that bullish energy has been completely drained from this market. When price trades below a stack of descending moving averages, the path of least resistance is almost always to the downside, and traders should be extremely cautious about trying to catch falling knives in this environment.

The RSI(14) reading of 46.02 is perhaps one of the more nuanced elements of this setup, as it sits in a neutral zone that does not scream oversold or overbought. However, context is everything here. During the entire decline from the 1.1855 peak, the RSI has failed to push back above the 60 level, which is a classic hallmark of a healthy downtrend. In strong bearish trends, the RSI tends to oscillate between 30 and 50, and the current reading fits perfectly within that framework. There is no bullish divergence forming at these lows, which would have been a potential early warning sign for sellers to take profits. Instead, the RSI appears to be resetting for another potential leg lower, suggesting that the bearish momentum still has room to extend before any meaningful bottoming process begins. The lack of divergence combined with the bearish moving average crossover is a powerful confluence that favors continued downside pressure. The Accelerator Oscillator (AC) reading of 0.000121 is barely positive, but it is essentially flatlining at the zero line, which confirms the lack of directional conviction at these levels. During the initial stages of the decline, the AC showed strong red histogram bars, indicating that bearish momentum was accelerating aggressively. Now, as price consolidates near the 1.1680–1.1693 zone, the AC has returned to neutral, which typically precedes a continuation of the prior trend rather than a reversal. In Bill Williams' trading methodology, when the AC flattens out near zero after a strong trend, it often represents a pause before the next impulse wave. Given that the prior impulse was clearly bearish, the probabilities favor a downside breakout from this consolidation. Traders should watch for the AC to turn negative again on the next few candles, as that would serve as a trigger for renewed selling pressure and a potential test of the 1.1645 support level. From a structural perspective, the price action from April 18th onward has formed a clear series of lower highs and lower lows, which is the definition of a downtrend. The consolidation zone between 1.1680 and 1.1715 appears to be a bearish flag or pennant formation, which are continuation patterns that resolve in the direction of the preceding trend. Volume and momentum characteristics, as inferred from the indicators, support this interpretation. The key level to watch on the downside is 1.1645; a decisive break below this floor would open the door for a much deeper correction, potentially targeting the 1.1600 psychological level or even lower. On the flip side, only a sustained move back above 1.1750 would invalidate this bearish thesis and suggest that the correction has run its course. Until that happens, the balance of evidence overwhelmingly supports a bearish outlook, and my bias remains firmly to the short side, with risk managed tightly above the 1.1750 resistance cluster.