US inflation is currently at 4.2%, more than anticipated. To curb this, Fed needs to hike the interest rates. The analysts in the US financial sector are convinced of no rate hikes anytime soon. Instead, asset tapering may be on the books. This fundamental view gives a view of US dollar being strong.

Now, we analyze the technical for EUR/USD.

- Market structure: Market structure for EURUSD is still bearish. The support zone of 1.1870- 1.1900 was breached earlier, which is now being tested as resistance. Only shorting based on resistance level is risky. So we will wait for further confluence with this resistance.

- Trendline: The descending trendline appears to be less convincing as the pivot points for the drawing are not really swing points or have gaps between them. Although, we do have a descending support trendline, drawn earlier, which converged with the RSI divergence.

- Retracement: The golden retracement area stands at 1.1930. This level may also confluence with EMA 200. Hence, the subjectivity of this area playing for shorts is high.

- EMA's: Both EMA 50 and 200 are above the current market conditions. There is no death cross yet. We may witness EMA 200 being retested at the golden retracement level.

- RSI/CCI: RSI and CCI both have bearish lengths until they cross 50 and 0 respectively. The divergence was formed earlier on both the oscillators which pushed the market back towards resistance. Now, the effect has been absorbed.

On H4, we do have a descending trendline break along with the EMA 50. The structure still remains bearish unless we have broken the Daily resistance and confirmed it as a breakout.

We will wait for market to further go up to the retracement levels of 75-78.6% with confluence of resistance. That would be the solid area to go for shorts.

Also, the RSI is currently at 61, which indicates bulls in control while CCI, is at 90. 
We will look for over-bought areas on the oscillators when market reaches our planned level of 1.1930. At this point, if we see a bearish divergence being formed, the probability of shorts has increased to 70%.

Till then, we only target our suggested level to look for shorts on EURUSD.

EURUSD potential sells from 1.1930

Jul 11 2021