In today’s analysis, let’s turn to EUR/USD, the most heavily traded currency pair in the world, where the technical stage is set for a potential sell signal.
The chart is currently showing several bearish features aligning in one place. First, we can spot a large head and shoulders pattern marked in orange. This classical reversal formation alone signals that momentum is shifting to the downside. On top of that, we’ve already seen the red uptrend line broken, confirming the weakness of buyers, and the green horizontal support level has also given way. Adding further weight to the bearish case, this week’s candle showed a long upper wick, suggesting a false comeback attempt that failed to hold, often a strong bearish clue.
Taken together, these signals point to a market that is preparing for another leg lower. As long as the price holds below the green resistance, sentiment remains firmly negative and traders should anticipate continued downside pressure. Of course, there’s still an alternative scenario to keep in mind: if EUR/USD manages to climb back above the green horizontal resistance and hold there, that would cancel the bearish outlook and flip the bias to bullish, providing a long signal. For now, though, the technicals remain tilted toward the bears.