EUR/USD at Make-or-Break Zone: Rejection Incoming1. COT Report (Commitment of Traders)
USD Index: Non-commercials (speculators) remain net short on the dollar (13,645 long vs 18,666 short). However, last week saw a slight increase in longs (+487) and a decrease in shorts (-597). This indicates a modest improvement in sentiment toward the greenback, though not yet a full reversal.
Euro: Non-commercials remain heavily long (255,660 long vs 136,068 short). Yet, last week showed a reduction in longs (-2,726) and an increase in shorts (+721), suggesting profit-taking and weaker bullish conviction.
👉 Overall, the COT reflects a potential rebalancing: euro net longs are being reduced, while dollar shorts are unwinding. This aligns with a possible relative strengthening of the USD.
2. Retail Sentiment
72% of retail traders are short EUR/USD, while only 28% are long.
👉 A classic contrarian signal: when the majority is short, the risk of upside squeezes remains. However, context matters—price is near key technical resistance, which leaves room for a potential fake-out to the upside before a reversal.
3. Seasonality (September)
Historically, September has been slightly positive for EUR/USD (+0.0021 average over the past 20 years).
👉 Seasonality favors a mild sideways-to-bullish bias in the early weeks of the month, with heightened volatility mid-month.
4. Technical Analysis (Chart)
Price is trading around a major resistance zone (1.1750–1.1800), which has already been rejected multiple times.
Structure: consolidation persists within the 1.1650–1.1750 range. Key demand lies at 1.1550–1.1600, extending down toward 1.1400 if breakdown occurs.
RSI is neutral—not overbought—leaving room for directional moves.
👉 Technical setup: failure to break 1.1750 opens the risk of a retracement toward 1.1600–1.1550, and potentially 1.1400, consistent with your chart projection.
Conclusion
COT: euro longs unwinding, dollar shorts decreasing → tilt in favor of USD.
Retail sentiment: contrarian, heavily short → risk of short-term upside spikes.
Seasonality: mild positive bias in September with mid-month volatility.
Technical: strong resistance at 1.1750, risk of rejection toward 1.1600–1.1550.
📌 Trading Bias : Neutral-to-bearish. In the short term, EUR/USD could test/spike above 1.1750 to hunt stops, but the medium-term outlook (COT + technicals) remains skewed toward a bearish correction into 1.1550–1.1450. Only a solid weekly breakout above 1.1800 would invalidate the short scenario.
