EUR/USD long-term technical analysis

U.S presidential election and the Fed interest-rate cut have shifted the momentum to the U.S. dollar which put pressure on its counterpart. EUR/USD heavily bearish since 2 months ago and the bearish movement seems gaining momentum. There is no bullish sign yet for now but further rate-cut by the Fed is expected to continue. Currently, the ECB refinancing rate sits at 3.4% while the Fed interest-rate at 4.5%. There is a big difference between the rate which caused weakness in EUR/USD. The longer the situation continues, EUR/USD will continue the bearish movement.

New Month

Monthly chart

EUR/USD fell with strong bearish momentum since it touched the 1.1200 level. The pair managed to reach 1.0350 and print a new lower low on the chart which might confirm a bearish continuation. Under the current situation, traders will avoid taking long positions and wait for further confirmation. We might see further weakness in the pair to target the parity level again. If the pair prints a new lower swing low then it might continue the bearish movement to target the level below 0.9600.

Weekly chart

EUR/USD bearish streak continues and the momentum gets stronger. Only 1 out of 8 weeks did the pair manage to print a bullish close. It is a falling knife situation and it is better to stay sideline until the bearish momentum wanes before deciding to enter long positions. As the pair currently trading near the bottom of 2023, we might see some bullish reactions as the bull has been stopped below the level. If the pair returns above 1.0600 before the end of the month then there is a high chance of upward movement to target the 1.0600 – 1.0850 area.

Daily chart

EUR/USD printing new lower swing high and lower swing low on the chart without any strong bullish sign. Each bullish movement quickly loses it momentum and falls with strong momentum. Until the pair stabilizes near the support level, it is better to stay out of long positions. On the upside, a new higher swing high above 1.0600 could become an initial confirmation of a bullish reversal.

Trade plan

The pair direction is bearish in the monthly-weekly-daily chart. There is no sign of bullish reactions right now which means it is better to stay with short positions. However, we are trading near the 2023 bottom which means there is a chance of a bullish reaction. Without any change of structure, traders will continue to maintain a bearish outlook but stay cautious as the downside potential might be limited.