EURUSD – short-term charts remain under downward pressure

The Euro traded cautiously on Tuesday following Monday’s bounce, which temporarily eased pressure on larger bearish positions from the 1.1808 peak.

Daily candlestick patterns offered mixed signals, with a bullish engulfing offset by strong upside rejection, leaving a long upper shadow that adds nuance to the overall technical picture.

Momentum indicators remain bearishly aligned. A daily Tenkan/Kijun-sen bear cross, combined with the still-influential daily cloud twist, suggests that near-term risks remain tilted to the downside.

A retest of the broken 50% retracement of the 1.1468–1.1808 rally at 1.1638, potentially extending toward the top of the thinning daily cloud near 1.1623, appears likely in the near term, particularly if Monday’s bull-trap above the broken 38.2% Fibonacci level at 1.1679 continues to influence price action, which also capped Tuesday’s upside.

Although the dollar faced headwinds from a renewed rally in safe-haven assets that supported precious metals, U.S. economic data released Tuesday showed inflation remained largely unchanged in December, slightly below expectations. This reinforces the view that the Fed may keep rates unchanged this month, providing continued support for the greenback.

Res: 1.1698; 1.1730; 1.1765; 1.1780
Sup: 1.1650; 1.1638; 1.1618; 1.1598