Last week, the EURUSD currency pair breached two local highs at 1.1150 and 1.1200 on the daily timeframe. In terms of macroeconomics, the weakening of the US dollar followed the general trend of a sell-off in US assets, including stock market instruments, corporate debt and government treasuries. In the longer term, if market confidence in the US financial system keeps weakening, EURUSD is likely to head into a long term uptrend with a technical target at 1.3500. This is where a broken support level from 2014 remained and has never been retested by the price. So it may well be that prices are getting a boost right now to complete this purely technical pattern. But this is quite a distant prospect, and even if it happens, it may take several years.
A return to the previously breached levels of 1.1150 and 1.1200 is now more likely. The probability of reaching 1.1220 is very high. The price literally flew above this level, which had been established in the fall of 2024, and figuratively "hung in the air" without any support. In order to get a chance for further upward movement, the price must consolidate on this level as a new support. If fundamental factors or news support the bearish scenario, the EURUSD will go lower — to the 1.1150 level, and even to the 1.0550 level in the most extreme case.
The overall recommendation is to sell EURUSD.
Profit could be taken at 1.1220. A stop loss could be set at 1.1550.
The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, does not exceed 1% of your deposit.
This content is for informational purposes only and is not intended to be investing advice.
