EUR/USD Technical Strategy – Confirmed Break Below 1.1300 Favors Selling the Rally, Eyes on 1.1250 Target

EUR/USD Analysis – Bearish Momentum Accelerates Below 1.1300, Opportunity for Selling the Rally?

Overview (May 8, 2025)

EUR/USD is currently trading around 1.1293, having clearly broken below the psychological threshold of 1.1300 amid ongoing downward pressure since the previous day. Recent candlesticks are showing successive bearish candles, indicating continued downside momentum from a technical perspective. The price is trading below both the 50-hour moving average (blue) and the 200-hour moving average (red), entering a typical bearish trend. ADX and DMI indicators also favor the sellers, suggesting that the market is increasingly poised to explore lower price levels.

Key Point 1: Below Both Moving Averages, Chart Structure Favors Sell-on-Rally Strategy

The current price is below both the 50-hour and 200-hour moving averages, with both acting as resistance. Notably, the 200MA is sloping downward, indicating a longer-term bearish bias. Even if short-term rebounds occur, these moving averages are expected to act as strong resistance zones, making this an ideal phase for a sell-on-rally strategy.

Key Point 2: Falling ADX and Expanding DMI Indicate Sustained Bearish Bias

The ADX (yellow) is declining again, but the –DI (red line) continues to exceed the +DI (green line), signaling a bearish directional bias. Although a falling ADX suggests a temporary slowdown in trend strength, the DMI direction remains downward, increasing the likelihood of renewed selling. If volume picks up, downside targets around 1.1270–1.1250 may come into focus.

Key Point 3: Flat Volume Indicates Caution, New Momentum Needed for Further Breakdown

Despite the price drop, volume has not surged significantly, indicating a wait-and-see attitude in the market. If a sharp increase in volume occurs, especially when breaking below 1.1270, short-term traders and algos may intensify the selling pressure, making further downside more probable.

※Image Source: cTrader Platform

Outlook and Trade Strategy

By focusing on the following price levels and technical signals, traders can better build short-term EUR/USD strategies:

• Continuation Below 1.1300: Sustained trading below 1.1300 brings 1.1270 and 1.1250 into focus as downside targets.
• Sell-on-Rally Zone: 1.1320–1.1340: This zone, where moving averages cluster, presents a favorable area for short entries.
• ADX Rebound: If ADX rises toward 0.20 again, it could signal renewed trend momentum and provide breakout entry opportunities.

Trade Scenario Examples

Bearish Scenario (Sell-on-Rally)
Entry: Short after confirming a pullback to 1.1320–1.1335
Target: 1.1270–1.1250
Stop Loss: Above 1.1350

Bullish Scenario (Support Rebound)
Entry: Long after confirming rebound at 1.1270
Target: 1.1310–1.1325
Stop Loss: Below 1.1260

Conclusion:

EUR/USD is clearly in a bearish technical phase, where a sell-on-rally approach is especially effective. With the break below the psychological 1.1300 level, the downward momentum remains supported by moving averages and DMI direction. Traders should closely monitor ADX recovery and volume shifts while maintaining disciplined risk management.

Disclaimer:

This article is intended for informational purposes only and does not constitute a recommendation to buy or sell any specific currency pair or financial instrument. All trading decisions should be made at your own discretion.
For the latest currency pair analysis and market news, please visit the FIXIO Blog regularly to help improve your trading performance.