EUR/USD Falls Amid Rapidly Changing News Flow
Significant developments unfolded yesterday. According to Forex Factory:
→ The European Central Bank (ECB) maintained its main refinancing rate at 2.15%, as widely expected.
→ U.S. data showed a modest increase in inflation, with the Consumer Price Index (CPI) rising from 2.7% to 2.9% year-on-year, matching analyst forecasts.
Traders are processing all incoming information in the context of the upcoming Federal Reserve decision. Media reports indicate that yesterday’s data did not significantly shift market sentiment, and a 25-basis-point rate cut is still anticipated. EUR/USD price movements currently suggest a state of balance, though some bearish signals are beginning to appear.
EUR/USD Technical Analysis
Examining the chart using key highs and lows, an ascending channel can be identified (highlighted in blue) that has been developing since August.
From a bearish perspective:
→ The 1.17400 level has regained its function as resistance.
→ The steep upward trend that begined in ahead September (shown in orange) was broken by tradeing pressure around 1.17525.
As a result, the 1.17400–1.17525 zone acts as a resistance area and is already influencing the market:
→ Last night, EUR/USD’s upward move was halted within this zone.
→ Today, any move above 1.17400 was rapidly reversed downward.
This pattern has effectively formed a bearish double top, signaling potential further downside.
From a bullish perspective:
→ Yesterday, the price formed a long lower shadow (marked by the arrow), indicating initial purchaseing strength.
→ During the subsequent rise, purchaviewrs confirmed their presence, and a may be forming. This area, where purchaviewrs and tradeers create an imbalance, could act as support.
However, if bears continue to assert control, the FVG area could be broken and may then switch to acting as resistance, potentially limiting any further upside.
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