EUR/USD at a Turning Point:Rally or Trap for the Bulls?

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Technical Analysis
Price has decisively broken out of the descending channel highlighted in recent weeks. The weekly support zone between 1.1540 – 1.1580 is holding, triggering a significant technical reaction. The weekly RSI has entered oversold territory, suggesting a potential short-term reversal.

Key Support: 1.1530–1.1580 (currently reacting)

Key Resistance: 1.1720–1.1780 (inefficiency & supply zone)

Base Case: Potential rebound toward 1.1720–1.1750 before next structural decision

🧠 Sentiment Analysis

82% of retail traders are long, with an average entry at 1.1635
Only 18% are short, a clear minority
This extreme imbalance suggests downside pressure may persist to flush out weak long hands before a genuine reversal takes place.

COT (Commitment of Traders)

USD Index:
Non-Commercials increased both long (+663) and short (+449) positions → uncertain stance but slight USD strengthening

EUR Futures:
Non-Commercials increased long (+6,284) and short (+8,990) positions, but net increase favors the bears

This shift signals a bearish turn in sentiment among large speculators, indicating short-term downward pressure.

Seasonality

In July, EUR/USD historically tends to rise, but:
This year’s price action is underperforming the seasonal pattern, showing relative weakness
August is historically flat to slightly bearish
Seasonality does not currently support a strong bullish continuation

Strategic Conclusion

Current Bias: Bearish-neutral (with short-term bullish bounce expected)
A technical rebound toward 1.1720–1.1750 is likely (liquidity void + RSI bounce + retail imbalance)
However, 1.1720–1.1750 is a key supply zone to monitor for fresh shorts, in line with:

Dollar-supportive COT data
Overcrowded long retail positioning
Weak seasonal context

🧭 Operational Plan:

Avoid holding longs above 1.1750 without macro confirmation
Monitor price action between 1.1720–1.1750 for potential short re-entry
Clean breakout above 1.1780 → shift bias to neutral/bullish
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[jacson4]

Bullish momentum seems intact above the 50 EMA, but the repeated failure to close above 1.0980 suggests exhaustion. If bulls can reclaim 1.1000 with conviction, we may see a push toward 1.1050. Otherwise, a drop below 1.0910 opens the door for a deeper correction toward 1.0840.Eyes on U.S. CPI data and ECB forward guidance—macro triggers could flip the script either way."

[Nahid10]

The EUR/USD pair is flirting with resistance—and it could go either way.With mixed economic signals from both the Fed and ECB, markets are undecided. Bullish traders are betting on a breakout toward 1.11, but fading inflation in the eurozone and persistent U.S. strength might trap late longs.Neutral bias for now—confirmation above 1.1000 or below 1.0900 needed for a clean move.

[Nahiar806]

Very solid breakdown. The RSI bounce + retail long overcrowding is a classic combo for a short-term squeeze before continuation lower. Watching that 1.1720–1.1750 zone closely—textbook area for liquidity grab and potential reversal.

[Maxwell]

Love how this ties together technicals, sentiment, COT, and seasonality—complete picture. That retail long imbalance is a red flag for bulls. A flush below 1.1580 before any real rally wouldn’t surprise me.

[rafihasan]

The divergence between historical seasonality and current price action is telling. Weak hands might get rinsed soon. If USD continues to firm via COT trends, 1.1750 could be the top before another leg down.

[Maxwell]

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