EURUSD sell-off targets 1.1325

The near-term outlook for EURUSD is mildly bullish, largely due to oversold conditions on the shorter timeframes.

But here is the catch. According to data from brokers like Myfxbook, the retail crowd is overwhelmingly one-sided: roughly 66% of traders are long, while only 34% are short. In the Forex world, such an extreme skew often serves as a cautionary tale—a classic contrarian red flag.

On the macro front, the greenback has plenty of wind in its sails. The latest Federal Reserve (Fed) meeting delivered a hawkish surprise: half of the policymakers, under the new leadership of Chairman Kevin Warsh, are keeping a rate hike firmly on the table before year-end. This was enough to push the dollar index (DXY) back above 100.

The divide between these two economies is only getting starker. US retail sales came in hot at 0.9%, underscoring the resilience of American consumers and adding fresh fuel to inflation worries. This, in turn, gives the regulator a solid excuse to maintain borrowing costs elevated for a while longer.

Across the pond, the eurozone is swimming against the tide. Its current account surplus fell far short of expectations—a red flag that points to capital outflows. Real economy figures only added to the gloom: construction activity slowed to a crawl at just 0.57%. Such a glaring gap between the two regions leaves the European Central Bank (ECB) with its hands tied, and markets have already been betting on more aggressive monetary easing in Europe than in the United States.

With the retail herd still being heavily long, the stage is set for a potential breakdown below the critical 1.14500 support. If bears push prices below this level, it could trigger a wave of forced liquidations. In this case, the next target to watch in the coming sessions will be 1.1325.

The ultimate recommendation is to sell the EURUSD pair. Lock in profits at 1.1325. Place Stop Loss at 1.1560.

Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.