The EURUSD attempted to rise above its 200-hour moving average of 1.13510 during early U.S. trading but failed to maintain momentum. Buyers faltered once more, reminiscent of similar activity on Friday, leading to fresh selling interest and a drop below both the 200-hour and 100-hour moving averages.

The immediate downside target is 1.13072, a previous low, with further declines potentially reaching the swing area between 1.1271 and 1.12754. Below these levels, the 38.2% retracement of the March–April rally, located at 1.12505, is a pivotal point for buyers to uphold if the broader uptrend is to be preserved.

Though buyers are having difficulty pushing prices upward, sellers are also not yet in a commanding position. A decisive move below the 1.12505 level would indicate a shift of control back to sellers, challenging the 843-pip rally from the 1.0729 low on March 27 to the 1.15726 high on April 21.

What we’ve been observing on the EUR/USD chart over the past few sessions is the behaviour of a currency pair that’s running into repeated resistance, yet also showing reluctance to break down decisively. The push above the 200-hour moving average—an area often watched for signs of short-term strength—was short-lived. The failure to hold that ground, particularly after a similar stumble late last week, triggered renewed selling interest. This tells us buyers didn’t have the strength to build on minor gains, and in doing so, created space for sellers to step back in.

Now, we see price sitting below both the 200- and 100-hour moving averages. This tells us that the shorter-term momentum has shifted lower. When price sits under both of these averages, it’s indicative of a loss of upward pressure. Shorter-term derivatives models that track price momentum would favour the downside as a base case, especially with the hourly structure weakening as it has.

Near-term, price is inches away from retesting 1.13072. Historically, it acted as a base for a bounce, so if price glides through it without hesitation, that would tighten pressure beneath. After that, we get into the thicker swing zone between 1.12710 and 1.12754. This isn’t a zone to treat lightly—several recent rejections have come from this band. This makes it useful for us in gauging whether sellers are aiming to extend the downside push or just probing, only to step away again.

Further beneath, our eyes would drop to the 38.2% retracement of the last identifiable upside rally, which comes in close to 1.12505. It’s worth remembering that this type of retracement has significance in how prices tend to respect prior rallies. Sellers often look to take partial profit near these measures, while buyers may dip in cautiously. This is especially true if the broader rally from late March is still considered intact. So, how we trade around that retracement level could suggest whether this recent pullback becomes part of a larger correction—or a temporary breather.

Now, while downward movement is gathering some weight, it hasn’t yet taken full authority. That’s clear from the absence of sharp follow-through—it’s been more of a soft nudge than a broad shove. Nevertheless, when the market begins to lean in a certain way, watching how liquidity behaves around retest lows can offer more than moving-average signals. Especially when algorithms tied to volume models begin reacting more aggressively.

From a volatility perspective, implied confidence is still moderate. Options-related flows are not pricing extreme moves, but the daily range compression can’t be expected to hold indefinitely. A wider breakout on the back of an external catalyst—or a technical level giving way—could trigger option gamma functions that shift intraday behaviour quickly. Watch those inflection points carefully.

For now, we stay alert to exhaustion from both camps. It’s a tightening coil with clearer levels ahead. If any rebound stalls yet again before reclaiming those moving averages, it would reinforce short-term bearish leanings. Otherwise, we may be stuck watching a market wrestling within its own uncertainty for a while longer.