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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