Unveiling the Secrets of EUR/USD: When Long-Term Trends Reverse
The Art of Trading: Navigating the Complex World of Market Trends
In the world of trading, it's common to see traders trying to fade the trend, seeking value in overpriced or underpriced markets. However, this natural instinct doesn't always translate to successful trades, especially in the complex realm of financial markets.
The EUR/USD Journey: A Tale of Ups and Downs
Let's take a closer look at the EUR/USD pair. From January to July 2025, we witnessed a remarkable uptrend, with the pair surging from 1.01 to 1.18. Those who predicted a reversal initially saw their bets pay off, as the pair dropped by a significant 4,000 pips. But here's where it gets controversial: the market didn't follow the expected downtrend script.
From late July to the September FOMC meeting, the pair consolidated and even broke new yearly highs, reaching 1.19188. This strong uptrend often attracts banks and algorithms seeking re-entry points, leading to further consolidation and continuation of the trend. But is this the end of the story?
The Double-Top Mystery: A Potential Reversal Signal
As of October 13, 2025, we're observing a bearish divergence double-top, which could indicate a longer-term correction. The key lesson here is that strong trends rarely reverse in a single move. Double tops, across various timeframes, tend to be more reliable signals of potential trend reversals.
Multi-Timeframe Analysis: Unraveling the EUR/USD Mystery
Weekly Chart:
The 2025 rise culminated in a two-wave top before the current correction. The first six months saw an uninterrupted bull run, resulting in a +16.40% move within a tight weekly channel. The second wave, however, lacked the momentum to reach new highs, a key indicator of potential divergence.
Daily Chart:
Zooming in, we see the price extremes of September 17 met with sharp rejection. The price action formed a downward channel, breaking through multiple levels more progressively than the July correction. It's important to note that sudden crashes often lead to subsequent dip-buying, as emergency selloffs may not be sustainable but can signal a shift in sentiment.
4H Chart and Levels:
Keep an eye on the bearish cross between the 4H MA 50 and 200. A rebound at the immediate support of 1.1560-1.16 would be crucial for bulls. On the other hand, a break below this support could trigger further selloffs.
Resistance and Support Levels:
- Resistance: 1.1630 (Intermediate Pivot), 1.1750 (mini-resistance), 1.18-1.1830 (main resistance), 1.19188 (2025 highs), 1.19-1.1950 (Sep 2021 highs)
- Support: 1.1560-1.16 (immediate support), 1.1470 (pivotal support), 1.1350-1.14 (main support), 1.13916 (August 1st lows)
Safe Trading Tips:
- Monitor the downward channel's mid-line for potential support.
- Downward channels can be resilient due to their consistent and progressive speed.
- Sudden crashes may lead to dip-buying, but the trend's direction remains crucial.
Conclusion:
Understanding market trends and potential reversals is a complex art. This EUR/USD analysis highlights the importance of multi-timeframe analysis and the subtle signals that can indicate a shift in market sentiment. Remember, trading is a journey, and each move brings new lessons. Stay tuned for more insights and join the conversation below!
Author: Elior Manier, Market Analyst with over 7 years of experience, specializing in integrating geopolitical and technical analysis.
Disclaimer: Opinions expressed are the author's and do not reflect those of OANDA Business Information & Services, Inc. or its affiliates. This publication is for informational and educational purposes only. For more information, visit MarketPulse, an award-winning forex analysis site.
