4 min readFollowing weaker than expected French CPI data, EUR/USD faced renewed downside pressure, even as the broader primary trend remains bullish. The daily structure still suggests a sequence of higher highs and higher lows, as seen by the green ascending trend lines on the chart. However, the latest rejection near the previous swing high introduces the possibility of a lower high forming.
If the move continues and EUR/USD breaks below the recent swing low around 1.1065, this would mark a significant shift in structure. Such a move could potentially invalidate the primary uptrend and open the door for a deeper retracement.
On the 4-hour chart, we are now seeing early signs of weakness. The previous swing low in the local trend has broken and momentum appears to be slowing. That said, price is currently approaching a key confluence zone. This includes the rising trendline, the 0.618 Fibonacci retracement, and both the 20 and 50 EMAs on the 4-hour timeframe.
This area, marked by a white circle on the chart, will be crucial in determining the next direction. A bounce from this zone would support the idea that the trend remains intact. However, a clean breakdown below would increase the likelihood of further downside and possibly confirm a shift in the broader market structure.
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