EUR/USD: Navigating Supply Zones and Future Trends

This morning, the EUR/USD pair opened at 1.05279, experiencing an initial push before retreating to around 1.04700. As I draft this analysis, the market is exhibiting a rejection spike, indicating volatile trading conditions. Currently, the price is lingering within a supply zone established last week, where we witnessed a notable bearish impulse followed by a sharp bullish reversal leading us to our present levels.

In the absence of significant macroeconomic updates or policy news to influence the currency markets, we will be closely observing any developments surrounding tariffs and the US's stance on European security as they unfold this week.

Additionally, the upcoming PCE inflation figures from the United States, scheduled for release on Friday, will be under the scrutinization of Federal Open Market Committee (FOMC) officials, as usual.

Our outlook remains robust, as we anticipate a potential bearish trend in the market. The current price resides within a supply area, supported by the latest Commitment of Traders (COT) report, which indicates a bullish sentiment among retail traders. Furthermore, our forecasting indicators suggest a looming bearish trend, consistent with patterns observed over the past decade during this timeframe. We are positioning ourselves for a bearish week ahead.

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