Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Euro Technical Forecast: EUR/USD Bear Flag Break Seeks Support

Euro Technical Forecast: EUR/USD Bear Flag Break Seeks Support

Warren Venketas, Analyst
What's on this page

EUR/USD Analysis

  • Stacked economic calendar next week.
  • ECB in focus.
  • Strong downtrend may be waning.


After the Federal Reserve’s hawkish slant earlier this week, the ECB will be in full view next week particularly around its inflationary stance. The divergence between the two major central banks are stark however money markets tend to be at loggerheads with ECB officials as reflected in the markets pricing in a 35bps rate hike by the end of the year (while ECB officials reiterate the unlikelihood of a rate hike by year end).

Inflation and GDP data is scheduled leading up to the ECB meet which may hamper hawkish pressure. Both prints are expected lower than prior figures although inflationary pressure may not be dismissed too quickly as the ongoing Russia/Ukraine tensions continue to weigh on European oil and gas prices. While there is no rate hike expected next week, clarity around the thought process of the ECB will be monitored closely via the press conference post-announcement.

Eurozone economic calendar

Source: DailyFX Economic Calendar

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Warren Venketas
Trading Forex News: The Strategy
Get My Guide
EUR Forecast
EUR Forecast
Recommended by Warren Venketas
Get Your Free EUR Forecast
Get My Guide



EURUSD daily chart

Chart prepared by Warren Venketas, IG

The Euro comes under heavy fire this week post-FOMC and broke the bear flag support zone (blue) after consolidating upwards since mid-November 2021. Swing lows were also taken out yesterday at 1.1186 leaving the 1.1100 psychological level in striking distance (last seen in May 2021).

The U.S. dollar continues its run in early trading this Friday leaving the EUR roughly 2% down YTD.

Downside momentum may be fading suggested by the Relative Strength Index (RSI) moving into oversold territory. Bullish divergence (green) may also be unfolding on the oscillator whereby the RSI reading opposes current EUR/USD price action.

I think there is more room to run around the 1.1100 support zone and potentially 1.1000 but thereafter a reversal to the upside is likely.

Resistance levels:

  • 1.1300
  • 1.1186

Support levels:

  • 1.1100
  • 1.1000


IGCS shows retail traders are currently long on EUR/USD, with 69% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment leaving a bearish disposition on the pair.

EUR/USD Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -6% -8% -6%
Weekly 8% -15% -2%
Learn how to use Sentiment in your trading strategy
Get My Guide

Contact and follow Warren on Twitter: @WVenketas

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.