With the Non-Farm Payrolls report approaching, EUR/USD is trading at a critical location where technical structure, market positioning and sentiment are beginning to align. While today's employment data could generate significant volatility, I believe the higher timeframe continues to favor selling rallies rather than chasing the current bounce.
From a technical perspective, EUR/USD remains inside a well-defined bearish structure. Since the April highs, the market has been printing lower highs and lower lows, confirming that sellers are still in control. After reaching a major demand zone around 1.1330, buyers have managed to trigger a short-term rebound, but I currently view this move as corrective.
The area attracting my attention sits between 1.1450 and 1.15.
This zone combines multiple technical confluences:
Daily Supply
Previous market structure
Descending trendline resistance
Fair Value Gap
If price retraces into this area after the NFP release and produces bearish confirmation on the lower timeframes, I will be looking for new short opportunities aligned with the prevailing trend.
Retail Sentiment
Retail traders continue positioning against the current market structure.
Current positioning shows:
65% Long
35% Short
Almost two-thirds of retail traders are expecting higher prices.
Historically, when retail positioning becomes this one-sided, it often acts as a contrarian signal. As long as traders continue buying into a bearish structure, sentiment remains supportive of further downside.
Commitment of Traders
Institutional positioning also deserves attention.
Large Speculators remain net long EUR futures, but the latest report shows an increase in both long and short positions, suggesting growing uncertainty rather than aggressive bullish conviction.
On the other side, the US Dollar Index continues to show a healthy net long positioning among Non-Commercial traders, indicating that institutional demand for the dollar remains intact.
This divergence explains why, despite positive long-term positioning on the euro, EUR/USD has struggled to regain upward momentum.
Seasonality
Historically, July has been one of the strongest months for EUR/USD.
Across multiple historical samples, July has delivered positive average returns, supporting the possibility of a short-term recovery during the first part of the month.
However, seasonality should not be considered in isolation.
At the moment, bearish price structure, retail positioning and ongoing dollar strength outweigh the seasonal tailwind.
For this reason, I see any recovery as a potential opportunity to reposition with the broader trend rather than evidence of a lasting reversal.
NFP Risk
Today's Non-Farm Payrolls will likely dictate short-term direction.
Market expectations:
Non-Farm Payrolls: 114K
Average Hourly Earnings: 0.3%
Unemployment Rate: 4.3%
A stronger-than-expected report would likely strengthen the US Dollar and increase the probability of EUR/USD continuing lower.
Conversely, weaker employment data could fuel a temporary relief rally into the supply zones I'm monitoring.
My Trading Plan
Waiting for:
Liquidity Sweep
Change of Character (CHoCH)
Break of Structure (BOS)
Strong bearish rejection
🎯 Targets
TP1: 1.1450
TP2: 1.1330
TP3: 1.1250
From a technical perspective, EUR/USD remains inside a well-defined bearish structure. Since the April highs, the market has been printing lower highs and lower lows, confirming that sellers are still in control. After reaching a major demand zone around 1.1330, buyers have managed to trigger a short-term rebound, but I currently view this move as corrective.
The area attracting my attention sits between 1.1450 and 1.15.
This zone combines multiple technical confluences:
Daily Supply
Previous market structure
Descending trendline resistance
Fair Value Gap
If price retraces into this area after the NFP release and produces bearish confirmation on the lower timeframes, I will be looking for new short opportunities aligned with the prevailing trend.
Retail Sentiment
Retail traders continue positioning against the current market structure.
Current positioning shows:
65% Long
35% Short
Almost two-thirds of retail traders are expecting higher prices.
Historically, when retail positioning becomes this one-sided, it often acts as a contrarian signal. As long as traders continue buying into a bearish structure, sentiment remains supportive of further downside.
Commitment of Traders
Institutional positioning also deserves attention.
Large Speculators remain net long EUR futures, but the latest report shows an increase in both long and short positions, suggesting growing uncertainty rather than aggressive bullish conviction.
On the other side, the US Dollar Index continues to show a healthy net long positioning among Non-Commercial traders, indicating that institutional demand for the dollar remains intact.
This divergence explains why, despite positive long-term positioning on the euro, EUR/USD has struggled to regain upward momentum.
Seasonality
Historically, July has been one of the strongest months for EUR/USD.
Across multiple historical samples, July has delivered positive average returns, supporting the possibility of a short-term recovery during the first part of the month.
However, seasonality should not be considered in isolation.
At the moment, bearish price structure, retail positioning and ongoing dollar strength outweigh the seasonal tailwind.
For this reason, I see any recovery as a potential opportunity to reposition with the broader trend rather than evidence of a lasting reversal.
NFP Risk
Today's Non-Farm Payrolls will likely dictate short-term direction.
Market expectations:
Non-Farm Payrolls: 114K
Average Hourly Earnings: 0.3%
Unemployment Rate: 4.3%
A stronger-than-expected report would likely strengthen the US Dollar and increase the probability of EUR/USD continuing lower.
Conversely, weaker employment data could fuel a temporary relief rally into the supply zones I'm monitoring.
My Trading Plan
Waiting for:
Liquidity Sweep
Change of Character (CHoCH)
Break of Structure (BOS)
Strong bearish rejection
🎯 Targets
TP1: 1.1450
TP2: 1.1330
TP3: 1.1250
📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.