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EUR/USD Technical Analysis: Potential Bearish Breakout on the H4 Time Frame

EUR/USD movement on the 4-hour time frame is starting to show signs of weakening after previously strengthening to test the supply area around 1.1570. Using a combination of Moving Averages, Bollinger Bands, and MACD, there are several technical signals that need to be monitored to assess the potential direction of the next price move. On the H4 chart, price is currently retesting the trendline around the 1.15383 level after gradually declining from the 1.1570 supply area. Selling pressure has been visible since the start of this week’s trading. Although the bearish momentum is not yet very aggressive, price action has been consistently forming downside pressure, bringing price back to around the middle Bollinger Band. The middle Bollinger Band is an important area in determining the continuation of the price direction. If price is able to break and hold below this area, the probability of further downside will increase. In that scenario, price has the potential to move toward the lower Bollinger Band while also testing the 50 EMA located around 1.1520. Interestingly, this area is also close to dynamic support, so it can become a key zone in determining the next price reaction. In addition to those indicators, the 1.15378 level also deserves attention because it is close to the trendline currently being tested. If price manages to break that trendline validly, this condition can serve as an initial confirmation of a bearish breakout. If the breakout is supported by sufficient momentum, the probability of price extending its decline toward the next support around 1.1477 will increase. From a momentum perspective, MACD is still showing a bearish bias. It is moving below the signal line and continues to weaken. The MACD line getting closer to the zero line also needs to be watched. If the indicator manages to break below the zero line, this can be an additional confirmation that selling pressure is becoming more dominant and that bearish momentum is likely to continue. Based on the combination of price structure, Bollinger Bands, the 50 EMA, and MACD, the short-term bias currently leans more toward a bearish scenario, with the caveat that the trendline breakout still needs to be confirmed first. Trading Plan For the short-term scenario, focus can be directed to sell opportunities around 1.1524, with a target toward 1.1477 and a stop loss at 1.1570. However, entries should still wait for breakout and momentum confirmation to avoid the risk of a false breakout.