EURUSD Drops Into Key Support — Can Buyers Defend the Uptrend?

Market Structure

EURUSD remains within a broader bullish structure despite the latest sharp selloff. The recent decline broke below the short-term consolidation range, but price is now testing an important demand area where buyers previously stepped in. As long as the current support zone holds, the larger sequence of higher lows remains valid, although short-term momentum has clearly weakened.

Market Sentiment - Neutral to Moderately Bullish

The recent bearish impulse has cooled market optimism, but buyers have already shown an initial response near support. Sentiment remains cautious as traders wait to see whether this move develops into a rebound or a deeper correction.

Bullish Scenario

If buyers successfully defend the first support and reclaim the first resistance, bullish momentum could gradually return and open the way toward the second resistance, suggesting that the recent decline was only a corrective pullback.

Bearish Scenario

If sellers break below the first support, downside momentum could accelerate toward the second support, increasing the probability of a deeper correction within the broader trend.

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Market Outlook

The recent decline appears to be a corrective move rather than a confirmed trend reversal. Price is currently attempting to stabilize around an important support area, and the next directional move will likely depend on whether buyers can quickly regain nearby resistance.

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Key Levels

First Resistance 1.1610
Second Resistance 1.1660

First Support 1.1580
Second Support 1.1540

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Future Scenarios

A sustained move above 1.1610 would suggest buyers are regaining control and could expose 1.1660, reinforcing the broader bullish structure.

However, if price closes below 1.1580, selling pressure could intensify toward 1.1540 before stronger buying interest emerges.

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Event Risk

EURUSD remains highly sensitive to both Eurozone and U.S. macroeconomic developments.

Market participants continue to monitor Federal Reserve policy expectations, European Central Bank guidance, inflation data, labor-market reports, PMI releases, GDP growth, Treasury yields, and overall U.S. Dollar strength. Any meaningful shift in monetary policy expectations could quickly influence the pair.

The next confirmed major macro event is the Federal Reserve meeting on September 15–16, 2026. Changes in interest-rate expectations could affect EURUSD through yield differentials, U.S. Dollar demand, and broader market risk sentiment.

Ultimately, price reaction matters more than the headline itself. If positive news cannot lift EURUSD above 1.1610–1.1660, bullish expectations may already be priced in. Conversely, if negative news fails to break 1.1580–1.1540, selling momentum may be fading and buyers could gradually regain control.

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Do you think EURUSD is simply completing a healthy pullback before resuming its uptrend, or is this the beginning of a larger bearish reversal?