EURUSD (2H) - High Volatility and Bearish Momentum

Feb 9

EURUSD

📶Technical Analysis:

Weekly Chart
🟢 The overall trend has been consistently bearish since October 2024, indicating a longer-term downtrend
🟢 A strong level of support has been broken and tested at 1.0500, indicating potential for further bearish movement.
🟠 In the past three weeks, volatility has significantly increased, due to a combination of fundamental factors.

Daily Chart
🟢 The overall trend has been bearish since October 2024, reinforcing a larger downside momentum.

4-Hour Chart
🟡 There was a bullish trend early in 2025, but it was broken, and bearish momentum took over by the end of January.
🔴 The February opening gap, influenced by Trump tariffs, caused a strong bullish volatility before a reversal took place.

2-Hour Chart
🟢 A reversal pattern in the form of a double top is visible, suggesting that the bullish momentum has ended. This pattern has been confirmed by two lower highs and two lower lows.
🟡 Watch for a retest of the 1.035 resistance level and confirmation of the double top pattern.
🟢 A break below the recent low at 1.030 would suggest continued bearish movement.
🟠 The next strong support level on the daily chart is around 1.022, where the price could potentially stall or reverse if it moves lower.

🆕 Fundamental Analysis:

🟢 The EUR/USD dropped to near 1.0360 after the release of US Nonfarm Payrolls (NFP) data for January.
🟡 US Labor Market: The economy added 143K jobs, fewer than expected (170K), but the Unemployment Rate dropped to 4% (better than the expected 4.1%).
🟡 The Fed is expected to cut interest rates in its June meeting, but this is uncertain due to mixed signals from the labor market. Chair Powell indicated that any rate adjustments will depend on real progress in inflation or weakness in the labor market.
🟢 President Trump warned of potential tariffs on European goods, which could hurt the Eurozone economy. The Eurozone is facing increased uncertainty, with concerns about higher US tariffs negatively affecting growth.
🟢 EUR/USD faces continued selling pressure, as the Eurozone's economic outlook remains weak, especially with the risk of US tariffs and a dovish ECB.

🔤 Summary:

🟡 Neutral Position Above Red Trend Line: If the price breaks above the red trend line, it could signal a shift to a neutral position, requiring fresh analysis for clearer direction.
🟢 Bearish Continuation Confirmation: As long as the price remains below resistance and the double top formation holds, a bearish continuation is likely.
🟡 Watch for Key Breaks: Pay attention to the break below 1.030 and how price reacts to the 1.022 support level for further confirmation of the bearish trend.

Feb 12

Note

📶Technical Analysis:

🟡 The price reached the resistance level around 1.0360 where the trend line and 200 MA intersected. However, despite expectations, no bearish reversal candlestick pattern formed, and the price didn’t confirm the reversal.
🔴 Increased volatility was observed on 13th February, with price moving in both directions, signaling an uncertain market condition.
🔴 The price broke above the trend line and the targeted resistance zone, invalidating the previous analysis of a short position. The pair reclaimed the 1.0400 level, reaching fresh weekly highs as the US Dollar pulled back.

🆕 Fundamental Analysis:

🟠 The CPI data reaffirmed concerns about inflation persistence, especially with both the headline and core readings coming in above expectations.
🟠 EUR/USD was supported by a weaker US Dollar and a growing belief that the Fed will keep its hawkish stance in response to persistent inflation.

Feb 12

Order cancelled

🔤 Summary:
🟡 The strong volatility and indecision suggest that the market needs to stabilize before identifying any clear trend.
🟡 Future trades should be based on the market confirming a more stable trend direction, whether it be a bullish or bearish continuation.