Facts:
- The EUR/USD exchange rate failed to break above the 200-day EMA
- The price remains below the 50-, 100-, and 200-day exponential moving averages (EMA)
Recommendation:
Trade: Short position on the EUR/USD pair at market price
Take Profit 1: 1,14850
Take Profit 2: 1,14240
Stop: 1.16415
Opinion:
The EUR/USD pair failed to break above the 200-day exponential moving average (EMA), which is a key technical signal confirming the euro’s continued weakness against the dollar. The price remains below the 50-, 100-, and 200-day EMAs, creating a classic bearish pattern—each of these moving averages currently acts as dynamic resistance, pushing the price back down on subsequent attempts to rebound. A stop-loss set at 1.16415 marks the zone where this pattern would be negated and would force a revision of the scenario.
Fundamental and geopolitical context
Iran’s rejection of the U.S. peace plan signals that tensions in the Middle East may persist for much longer than the market had originally anticipated. Such a scenario favors a steady inflow of capital into the dollar, a traditional safe-haven currency, and growing geopolitical uncertainty, combined with expectations of a return of inflationary pressure, creates solid foundations for a medium-term appreciation of the USD. Although the scale of the recent USD strengthening remains relatively moderate, historical analogies suggest that in similar, multi-vector crises, the dollar has tended to strengthen further.
Methodology and assumptions:
This recommendation is based on a technical analysis of the EURUSD chart. Classical technical analysis was used to assess the situation and analyze the trend. The target level—take profit 1—was set at the level of previous price reactions, using price action methodology. Take profit 2, on the other hand, is based on the location of this month’s local low. The protective stop-loss order was set above the most recent local high using price action methodology.