ECONOMIC FAMINE (PART 2)

OVERVIEW

• The EUR/USD pair is locked in a strong downtrend, with major resistance at 1.13835 and critical support at 0.6155.
  
• A break below 0.8931 could signal severe economic implications.
  
• Technical indicators, including moving averages and oscillators, are predominantly bearish, with recent patterns hinting at a potential short-term bullish recovery above 1.0610, targeting levels like 1.0710, 1.0960, and 1.1320.
  
• Fundamentally, interest rate cuts by the ECB and Fed are key drivers of recent price action, keeping the pair in a narrow range.
  
• Long-term forecasts predict further euro weakness, making this a crucial time for traders to manage risk effectively.
  
• Position traders should watch for potential breakdowns below key support, while short-term traders may find opportunities in bullish momentum above resistance levels.
  

TECHNICAL ANALYSIS

• The EUR/USD pair is experiencing a pronounced downtrend on the monthly timeframe, marked by significant pivot points:
  
• Pivot High: 1.16164
  
• Resistance Level (Major): 1.13835
  
• Resistance Level (Minor): 1.0630
  
• Support Levels: 0.6155 (critical) and 0.5633 (pivot low).
  
• A close below 0.8931 would confirm a larger, catastrophic economic downturn, with price movements potentially signaling a "Global Economic Famine."
  

Oscillators

• Indicators such as RSI (42.91), Stochastic %K (34.56), and Commodity Channel Index (-167.50) remain neutral, suggesting low momentum for a strong reversal in the short term.
  
• Momentum (-0.030) and MACD Level (-0.00416) indicate sell signals, aligning with the bearish sentiment.
  

Moving Averages

• All major EMAs and SMAs across periods (10 to 200) are aligned as sell signals, emphasizing the persistent bearish trend.
  
• The Ichimoku Base Line at 1.05029 is neutral, providing limited support for bullish recovery.
  TECHNICAL PATTERN OBSERVATIONS
  
• A double-top formation at 1.1200 in September signaled bearish control, supported by a death cross in EMAs.
  
• Recent inverse head-and-shoulders at 1.0333 suggests a potential bullish recovery if the price sustains above 1.0610, targeting 1.0710, 1.0960, and 1.1320
  

FUNDAMENTAL ANALYSIS
Interest Rate Outlook:

• In 2024, expectations for central bank rate cuts influenced the EUR/USD trading range between 1.0600–1.1210.
  
• The European Central Bank (ECB) initiated a rate cut in June (4.50% to 4.25%), while the US Federal Reserve followed in September (5.50% to 5.0%).
  

Forecasts & Risks:

• Long-term projections for 2026-2027 show the euro likely declining to 1.0250–1.0300, with adjustments possible based on macroeconomic shifts.
  
• If resistance at 1.0630 is broken, the EUR/USD may target the 1.0960–1.1260 range. However, failure to maintain these levels will reinforce the broader bearish trend.
  

STRATEGIC TAKEAWAYS

• Position Traders: Watch the critical support at 0.8931—a breach signals significant economic risks.
  
• Short-Term Traders: Closely monitor the 1.0610 level. Bullish action above this may present buying opportunities toward 1.0710, 1.0960, and 1.1320 but bearish dominance remains strong.