Break to Fresh Local Lows Opens Selling Opportunities on Pullbacks

Economic

Forex

Summary:

The chart could become saturated with indicators if the price attempts to test that upper zone, which would likely push the asset back down.

SELL EURUSD

EXP

PENDING

1.15930

Entry Price

1.14500

1.16600

1.15388 -0.00045 -0.04%

Pips

PENDING

1.14500

Exit Price

1.15930

Entry Price

1.16600

U.S. President Donald Trump published today on Truth Social that Iran had shot down an American Apache helicopter patrolling over the strategic Strait of Hormuz. "Nonetheless, the United States must, by necessity, respond to this attack," Trump wrote. Meanwhile, Israel pushed forward with military operations in southern Lebanon despite both sides previously agreeing to halt attacks, while Iran warned that fighting could easily restart if Israel continued its "aggression." These latest developments have dampened expectations for a near-term peace agreement between the United States and Iran. The two sides also remain far apart on key structural issues, including Iran's nuclear program, the release of frozen financial assets, and Tehran's demand for greater control over the Strait of Hormuz maritime corridor.

On the economic front, the official NFP employment report revealed that the United States generated 172,000 jobs in May, coming in at more than double the market expectation of 85,000 positions. Furthermore, the hiring data for April was strongly revised upward, printing at 179,000 jobs compared to the 115,000 published a month ago. Despite this hot print, other recent data from the U.S. labor market showed a larger-than-expected deterioration. Initial jobless claims for the week ending May 30 rose to 225,000, coming in above both the 213,000 projected by the market and the 212,000 reported during the previous week. In the same manner, the four-week moving average increased to 214,750 claims from the previous 208,250, pointing to a gradual moderation in overall employment conditions. Along the same line, job cuts announced by Challenger, Gray & Christmas rose from 83,387 to 97,006 in May, with the technology sector making up about 39% of the layoffs, which represents a 16% increase compared to the prior month.

In Europe, the Sentix Investor Confidence index for June improved to -13.4 points from the -16.4 logged in May, achieving its best result in three months but remaining far from leaving negative territory. At the same time, German factory orders dropped by 3.8% month-over-month in April after increasing by 4.5% in March, coming in worse than the 1.2% decline expected by experts. Meanwhile, the EU economy grew by 0.1% quarter-on-quarter in the first quarter of 2026, slowing down from the 0.2% and 0.3% growth rates recorded in the fourth and third quarters of 2025, respectively, which hints at an ongoing economic cooling amid rising prices. This occurs as the HICP reached 3.2% year-over-year, driven mainly by the energy shock tied to the conflict in Iran. Along the same line, the latest inflation figures from the Eurozone continue to support ongoing concerns regarding persistent price pressures.

The Producer Price Index (PPI) logged a monthly increase of 0.6% in April, following a significant 3.4% jump in March, which came in higher than market expectations. On a year-over-year basis, producer price growth accelerated to 4.9%, up from the revised 2.0% reading in the previous month. Similarly, the underlying core Harmonized Index of Consumer Prices (HICP) increased at an annual rate of 2.5% in May, moving up from the 2.2% reported in April and beating the consensus market forecast of 2.4%. Given this backdrop, monetary policymakers at the European Central Bank (ECB) remained vocal about their intentions to raise interest rates due to sticky inflation pushed by energy supply disruptions. Officials including Wunsch, Šimkus, Stournaras, Schnabel, and Nagel, among others, explicitly support a rate hike in June at the upcoming policy meeting. Break to Fresh Local Lows Opens Selling Opportunities on Pullbacks_1

Break to Fresh Local Lows Opens Selling Opportunities on Pullbacks_1

Technical Analysis

From a chart perspective, EUR/USD has completed a downward move that broke below previous support levels to print fresh local lows, which opens the door for the broader downward trend to keep developing. At present, entry opportunities to join the active bearish trend could emerge near the 1.1593 area, which aligns closely with the 0.50 Fibonacci retracement level and stands as a zone where the price might encounter horizontal resistance on any upward bounce. Meanwhile, the 100 and 200-period Moving Averages are running at 1.1614 and 1.1664, respectively. Because of this positioning, the chart could become saturated with indicators if the price attempts to test that upper zone, which would likely push the asset back down to target the lower local support floor near 1.1450.

A review of the oscillator section provides further cross-verification for this active downward path. The Relative Strength Index (RSI) is currently tracking at the 43 level, recovering rapidly after briefly dipping under the 30 oversold line during the recent drop. If a short-term upward move materializes from here, it could potentially build a slight hidden bearish divergence in the RSI, adding extra technical weight to the main downward trend.

At the same time, the MACD indicator is showing a negative histogram that is just beginning to build up some fresh downward strength, while the signal lines remain deeply embedded underneath the neutral zero threshold. This setup suggests that any near-term upward price bounce should be strictly viewed as a temporary technical retracement rather than a trend change, keeping the path of least resistance directed lower.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1593

Target price: 1.1450

Stop loss: 1.1660

Validity: Jun 19, 2026 15:00:00

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Break to Fresh Local Lows Opens Selling Opportunities on Pullbacks

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