EUR/USD: Anticipating Downside Movement Amid Market Imbalance

20 mag

Following our previous analysis of the EUR/USD pair, the price has approached the 1.0900 round level, which is significant as it is forming a potential double top pattern. This movement includes a retest of the previous high reached last Wednesday. Currently, there are no major news events impacting the market, which indicates that the price may experience a bearish outcome as it seeks to cover the imbalance observed in the previous week.

To support this analysis, I have included a Footprint analysis on a daily timeframe of the Euro futures. This detailed analysis shows that the price has started to exhibit a negative delta, and the cumulative delta has turned red, signaling a shift in market sentiment. Additionally, the volume profile analysis clearly identifies areas with inefficiencies, suggesting that there is an underlying weakness in the recent upward movement.

Given these technical indicators, we are expecting a bearish reversal in the near term. The absence of significant news today aligns with this outlook, as the market may be poised to correct the previous week's imbalance without external influences driving volatility. This confluence of factors strengthens our confidence in anticipating a downward movement for the EUR/USD pair.

In summary, the technical evidence from the Footprint analysis and volume profile, combined with the lack of impactful news events, points to a likely bearish reversal for the EUR/USD. We recommend closely monitoring these developments and adjusting trading strategies accordingly to capitalize on the anticipated market correction.

23 mag

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