Bearish Momentum Could Resume from Key Resistance

Manuel

Summary:

If this barrier continues to prove resilient, another corrective move to the downside may unfold.

SELL EURUSD

Close Time

CLOSED

1.16972

Entry Price

1.14500

1.18200

1.16215 -0.00034 -0.03%

122.8

Pips

Loss

1.14500

1.18205

Exit Price

1.16972

Entry Price

1.18200

The U.S. Bureau of Labor Statistics (BLS) revised its annual benchmark payrolls sharply lower, reporting a drop of -911K jobs as of March 2025, a steeper decline than the -682K projected by economists. This revision further strengthened the case for a potential Federal Reserve rate cut at next week’s policy meeting. However, the upcoming inflation figures could complicate matters for the central bank if either the Producer Price Index (PPI) or the Consumer Price Index (CPI) come in hotter than anticipated.

On the geopolitical front, U.S. President Donald Trump urged the European Union to impose 100% tariffs on Chinese and Indian goods in an attempt to ramp up pressure on Russian President Vladimir Putin, the Financial Times reported Tuesday. Washington also stated that the Trump administration is prepared to “mirror” any tariffs enacted by the EU, signaling that the U.S. could raise levies on Indian and Chinese imports to the same scale.

The spotlight now shifts to this week’s U.S. inflation data. Traders are closely watching Wednesday’s PPI release, expected to hold steady at 3.3% year-on-year, while the core PPI is seen easing from 3.7% to 3.5%. On Thursday, the CPI report is anticipated to show an increase from 2.7% to 2.9% year-on-year, with the core CPI projected to remain unchanged at 3.1%.

Weakness in the U.S. labor market has already led investors to fully price in a 25 basis-point rate cut by the Fed. August payrolls delivered a disappointing 22K jobs, while the unemployment rate edged higher from 4.2% to 4.3%, reinforcing gold’s appeal over the U.S. dollar. According to the Prime Market Terminal’s rate probability tool, market participants now assign an 88% chance of a quarter-point cut next week, while the odds of a larger 50 basis-point move remain slim at 12%.

In Europe, political risk continues to weigh on sentiment after French Prime Minister François Bayrou lost a parliamentary confidence vote on Monday, forcing his resignation. Investors are also awaiting remarks from ECB Governing Council member François Villeroy de Galhau, scheduled to speak later Tuesday, which could provide further clarity on the central bank’s stance. Bearish Momentum Could Resume from Key Resistance_1

Bearish Momentum Could Resume from Key Resistance_1

Technical Analysis

The EURUSD pair has repeatedly faced resistance at 1.1782, a level that has triggered two sharp pullbacks in recent sessions. If this barrier continues to prove resilient, another corrective move to the downside may unfold. On the 8-hour chart, the 100-period and 200-period moving averages sit closely aligned at 1.1640 and 1.1639, suggesting that a downside crossover from this area could generate a bearish signal and hint at a potential trend reversal. Should momentum extend lower, the next key support comes into view around 1.1450.

Meanwhile, the RSI has climbed to 66, just below overbought territory. Historically, the price has tended to pull back once it approaches these levels, so traders should monitor whether downward momentum strengthens here. Conversely, a confirmed close above the 1.1782 resistance could invalidate the bearish scenario and pave the way for additional gains.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1698

Target price: 1.1450

Stop loss: 1.1820

Validity: Sep 19, 2025 15:00:00

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Bearish Momentum Could Resume from Key Resistance

Technical Analysis

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