Market Overview
The EUR/USD currency pair on the weekly timeframe (W1) shows a complex structure where price has been trading within a long-term ascending channel.
While the broader trend appears bullish due to the rising channel, recent price action suggests that bearish pressure is increasing, indicating a potential shift in market direction.
EUR/USD Weekly Forecast and Outlook
In this EUR/USD weekly forecast, we analyze key levels, trend direction, and potential price movements in the forex market.
Technical Structure Analysis
1. Rising Channel Formation
The chart clearly illustrates a well-defined ascending channel, with:
- Higher lows forming along the lower trendline
- Repeated rejections near the upper boundary
This type of structure typically reflects a controlled bullish trend.
However, price behavior near the upper trendline shows signs of weakening momentum.
2. Rejection from Resistance
Recent price action indicates:
- Multiple rejections near the upper channel resistance
- Failure to sustain a breakout above previous highs
- Formation of lower highs within the channel
This suggests that buyers are losing strength, and sellers are gradually gaining control.
3. Moving Average and Bollinger Bands Signals
From the chart:
- Price is starting to move back toward the middle Bollinger Band
- Short-term moving averages are flattening
- Volatility appears to be contracting after the recent push upward
These signals often precede a potential correction or deeper pullback.
Bearish Scenario
If the current bearish momentum continues, the following scenario may unfold:
- Price breaks below the mid-channel support
- A move toward the lower trendline of the channel
- Potential downside target near the 1.0600 – 1.0800 zone
This area aligns with previous support levels and the lower boundary of the channel.
Bullish Scenario
Despite bearish pressure, the long-term structure is still technically bullish unless key support breaks.
For a bullish continuation:
- Price must hold above current support levels
- Buyers need to regain control and push price higher
- A breakout above the upper channel could trigger a new bullish leg
Key Levels to Watch
- Resistance: 1.18 – 1.20
- Support: 1.14 – 1.16
- Major Support (Channel Base): 1.06 – 1.08
These levels will play a crucial role in determining the next major move.
Trading Perspective
For long-term traders:
- The market is currently in a decision zone
- Bearish setups may appear on lower timeframes
- Confirmation is required before entering large positions
For short-term traders:
- Watch for breakdown confirmation
- Use lower timeframes for entry precision
Conclusion
Although EUR/USD remains within a long-term ascending channel, recent price action suggests increasing bearish pressure and potential downside risk.
A breakdown below key support levels could lead to a move toward the lower boundary of the channel, while a strong bullish breakout would invalidate the bearish outlook.
Traders should closely monitor price action around key levels to determine the next directional move.
About the Author
David William – Professional Forex & Crypto Trader
David William is a trader specializing in forex, gold (XAUUSD), and cryptocurrency markets. With over 8 years of trading experience, he focuses on technical analysis, price action, and market structure to identify high-probability trading opportunities.
More trading insights at trading-strategy-hub.com
Disclaimer: This analysis is for educational purposes only and does not constitute financial advice.