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Prevailing Downtrend Continues to Provide Selling Opportunities
Forex
Economic
Summary:
The MACD shows a histogram that is about to cross lower, and with the signal lines still in neutral territory, the downward path appears to be the line of least resistance.
Sell
TradingEURUSD
EXP
1.13684
Entry Price
1.12000
TP
1.14860
SL
1.13850 -0.00002 0.00%
0
Point
Flat
1.12000
TP
CLOSING
1.13684
Entry Price
1.14860
SL
The geopolitical situation in the Middle East showed signs of temporary stabilization at the beginning of the week. U.S. Ambassador to the United Nations Mike Waltz noted that President Donald Trump is granting room for diplomatic efforts, although he keeps all military options on the table. In the same vein, Tehran indicated it will refrain from launching new attacks provided Washington adopts a similar stance.
This backdrop triggered a sharp initial drop in oil prices, driven by expectations of reduced risks to global supply. However, the movement quickly lost momentum due to lingering uncertainty. Iranian Foreign Ministry spokesman Esmaeil Baghaei affirmed that the situation in the Strait of Hormuz remains unchanged and that this strategic maritime route continues to be closed.
In the United States, market focus is also directed toward monetary policy. Donald Trump praised Federal Reserve Chair Kevin Warsh and stated for the first time that interest rates should be reduced, though he acknowledged that final decisions rest with the monetary policy committee as a whole.
For his part, Treasury Secretary Scott Bessent defended the tax cuts promoted by the Trump administration, arguing they have provided significant relief to American households, particularly those with low and middle incomes.
Against this backdrop, Wednesday's Federal Reserve monetary policy meeting shapes up as the main point of interest for the week, alongside Thursday's release of the personal consumption expenditures (PCE) price index. Although consensus expects the Fed to keep rates unchanged, markets still assign a relevant probability to a potential additional adjustment in coming months. In fact, expectations for September continue to point to a high likelihood of a fresh rate hike.
In Europe, sentiment indicators offered moderately positive signals. Germany's IFO business climate index improved to 86.6 points in July from 85.7 in June, reflecting a slight improvement in corporate perception regarding economic performance.
Nevertheless, focus now shifts toward preliminary second-quarter GDP figures for Germany and the Eurozone. Analysts expect the regional economy to return to 0.2% quarterly growth following the contraction observed in the prior period, while annual growth could accelerate to 0.4%. In Germany's case, economic activity is expected to stagnate compared to the previous quarter, though annual growth could pick up slightly.
Likewise, markets will closely monitor the release of Germany's preliminary July inflation data. A monthly rebound in prices is expected after the drop recorded in June, a figure that could influence expectations regarding the European Central Bank's future monetary policy path. More persistent inflation would strengthen the case for maintaining a restrictive stance for longer, offering additional support to the euro.
Technical Analysis
EURUSD has been moving within a downtrend that recently marked a descending trendline accompanied by the 200-period moving average sitting at 1.1464, where it has repeatedly found downward momentum, while the 100-period moving average lies at 1.1421, following the trend closely. For now, price action sits below these levels, signaling bearish dominance; thus, we could see a new downward impulse toward the 1.0 Fibonacci expansion level in an AB=CD move. Consequently, if price fails to break above the trendline, a new leg lower remains likely.
Looking at the oscillators, the RSI reached its peak on July 15 upon hitting the 64 level, right as price reached its local high. Since then, price has corrected downward and the RSI has not printed a higher peak, now sitting at the 39 level—well aligned with the downtrend and with sufficient room to keep falling. Meanwhile, the MACD shows a histogram that is about to cross lower, and with the signal lines still in neutral territory, the downward path appears to be the line of least resistance.
Trading Recommendations
Trading direction: Sell
Entry price: 1.1368
Target price: 1.1200
Stop loss: 1.1486
Validity: Aug 07, 2026 15:00:00
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