EURUSD Short: Bearish Triangle Building Below SupplyHello traders! Here’s my technical outlook on EURUSD (1H) based on the current chart structure. EURUSD was previously trading within a well-defined descending channel, where price respected both the dynamic resistance and support boundaries while forming consistent lower highs and lower lows. This structure confirmed steady bearish pressure and controlled downside continuation rather than impulsive panic selling. Eventually, price broke below the lower boundary of the channel, confirming continuation of the bearish leg and reinforcing seller dominance. After this breakdown, the market entered a consolidation phase, forming a horizontal range where price moved sideways as buyers attempted to absorb supply while sellers paused after the impulsive drop. Later, EURUSD broke out of this range to the upside, initiating a recovery move that pushed price back toward the major Supply Zone near 1.1890. However, the bullish impulse failed to sustain acceptance above this area. Price formed another consolidation just beneath supply, while a descending supply trend line emerged, showing that sellers remain active at higher levels.
Currently, EURUSD is compressing between the descending supply line from above and a rising demand line from below. This tightening structure signals volatility contraction and suggests that a directional breakout is approaching. Importantly, price continues to trade below the key Supply Zone, indicating that recent bullish attempts may still be corrective in nature rather than the start of a new trend.
My primary scenario favors bearish continuation as long as EURUSD remains below the 1.1890 Supply Zone and continues to respect the descending supply line. The current compression structure appears more consistent with distribution rather than accumulation, suggesting that sellers may regain control once price breaks lower from the pattern. If bearish momentum resumes, the next logical downside target lies near the 1.1830 Demand Zone (TP1), which aligns with previous breakout levels and a key area where buyers previously stepped in. This zone represents the most probable location for price to seek liquidity and potentially stabilize. However, a strong breakout and sustained acceptance above the supply line and resistance zone would invalidate the bearish scenario and suggest a broader recovery or range expansion to the upside. For now, structure favors sellers, with rallies viewed as corrective unless resistance is reclaimed. Manage your risk!
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