Selling Opportunities Emerge near Trendline Aligned with Local Resistance

Forex

Economic

Summary:

Looking at the oscillators, the RSI reached the 64 level when it touched the trendline and moving average, and now sits at 43, leaving sufficient room for the move to continue.

SELL EURUSD

EXP

TRADING

1.14098

Entry Price

1.11860

1.15800

1.14228 +0.00119 +0.10%

0.0

Pips

Flat

1.11860

Exit Price

1.14098

Entry Price

1.15800

Tensions in the Middle East continue to intensify, dimming prospects for a diplomatic solution to the conflict between the United States and Iran. Washington carried out strikes against Iranian targets for an eleventh consecutive day, while President Donald Trump warned of the possibility of striking Pickaxe Mountain, a facility that, according to various estimates, houses strategic nuclear infrastructure.

For its part, Tehran responded by warning that any offensive against its nuclear facilities would trigger an expansion of the conflict throughout the region. At the same time, threats to maritime routes surged once again after three Saudi tankers altered course following the Houthis' announcement of a blockade in the Bab el-Mandeb Strait. This scenario has driven oil prices higher and generated fresh concerns for the Eurozone, an economy particularly sensitive to rising energy costs.

In this context, market attention centers on the European Central Bank (ECB) monetary policy meeting scheduled for Thursday. Although the institution is widely expected to keep interest rates unchanged, investors continue to assess the possibility of further monetary tightening in the coming months, especially if the rebound in energy prices eventually feeds into inflation. Remarks from President Christine Lagarde will be key to gauging these expectations.

In parallel, the latest business confidence data offered more encouraging signals for the European economy. The ZEW Institute's economic sentiment index for Germany rose to 26.3 points in July from 10.5 in June, reaching its highest level since February and comfortably beating market forecasts. Confidence for the Eurozone as a whole also improved significantly, landing at 23.4 points compared to 9.5 the previous month.

However, perceptions regarding current economic conditions remain weak. The indicator measuring the current situation improved slightly to -77.6 points from -81.0, but stays close to historical lows, reflecting that the improvement in expectations has not yet fully translated into a recovery in economic activity.

In the United States, recent indicators point to a gradual moderation in the labor market. The four-week moving average of ADP employment fell to 16.5k positions from 19.25k previously, while investor focus now turns to initial jobless claims—one of the last relevant data points ahead of the Federal Reserve's July 29 meeting.

Regarding monetary policy, Cleveland Fed President Beth Hammack recently noted that higher interest rates might be required to contain persistent inflationary pressures. Nonetheless, markets continue to anticipate that the Fed will keep borrowing costs unchanged at its upcoming meeting. Even so, expectations for the remainder of the year remain hawkish: CME Group's FedWatch tool shows traders assigning an 88% probability to the central bank implementing at least one additional rate hike before year-end. Selling Opportunities Emerge near Trendline Aligned with Local Resistance_1

Selling Opportunities Emerge near Trendline Aligned with Local Resistance_1

Technical Analysis

EURUSD has been moving within a marked downtrend, recently reacting downward upon drawing near a descending trendline that is accompanied by the 200-period moving average sitting at the 1.1454 level, while the 100-period moving average lies at 1.1422, both offering dynamic resistance to the trend. If the price fails to overcome the 1.1475 level, where local resistance aligns with the trendline, we could see a new bearish expansion targeting the 1.0 Fibonacci expansion level—representing a classic AB=CD move.

Looking at the oscillators, the RSI reached the 64 level when it touched the trendline and moving average, and now sits at 43, leaving sufficient room for the move to continue. Meanwhile, the MACD indicates a bearish histogram with very little depth, but with the signal lines already in negative territory. Consequently, the downward movement may just be starting to build, making the downside appear to be the path of least resistance.

Trading Recommendations

Trading direction: Sell

Entry price: 1.1409

Target price: 1.1186

Stop loss: 1.1580

Validity: Aug 04, 2026 15:00:00

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Selling Opportunities Emerge near Trendline Aligned with Local Resistance

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