EUR/USD – Bears maintain control, but extended consolidation could set the stage for a renewed move downward

EUR/USD weakened on Friday as recovery attempts from a fresh multi-month low of 1.0682, reached after Wednesday’s 1.7% post-election drop (the biggest daily loss since March 19, 2020), failed to break through the daily Tenkan-sen at 1.0809.

A bull-trap pattern has formed on the daily chart, adding to the near-term bearish outlook. Wednesday’s significant bearish daily candle exerts downward pressure, with technical indicators still showing a fully bearish setup, while the weekly Tenkan and Kijun-sen lines are converging and nearing a bearish crossover.

However, bears face resistance from the recent false break of the Fibo support at 1.0745 (the 76.4% retracement of the 1.0601 to 1.1214 rise). A weekly close above this level could signal a period of consolidation before a potential resumption of the broader downtrend.

Long shadows on the weekly candlestick also support this consolidation scenario.

In the near term, the bias remains bearish as long as the daily Tenkan-sen limits gains, with any extended upticks likely to be capped below the critical 200-day moving average at 1.0868.

Res: 1.0835; 1.0848; 1.0869; 1.0907
Sup: 1.0761; 1.0745; 1.0700; 1.0682