Why EUR/USD Dropped: A Step-by-Step Breakdown for Learners

📉 Overview:
The EUR/USD has recently approached a key resistance zone near 1.17726, showing signs of a potential rejection after a bullish rally. The price is currently hovering around 1.17468, forming a short-term bearish setup that could lead to a retracement or reversal.

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⚙ Key Technical Zones:
• 🔼 Resistance: 1.17500 – 1.17726
Price was strongly rejected after testing this area. This level has historically acted as a supply zone.
• 🔽 Support: 1.15500 – 1.16000
This is a historically significant demand zone, where price previously consolidated and reversed.
• 🎯 Target Zone: 1.16308
Marked as a potential take-profit level based on prior price structure and volume profile imbalance.

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🧠 Indicators & Tools:
• Bollinger Bands: Price touched the upper band in overbought conditions, suggesting a possible mean reversion.
• Volume Profile (VRVP): Indicates declining volume near resistance, pointing to weak buyer momentum.
• Price Action: Bearish engulfing candle and strong rejection wick at resistance, confirming selling pressure.

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🧭 Market Bias:

📌 Short-Term Bearish
A short opportunity is forming based on the rejection from resistance and overextension of price.

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🧩 Possible Scenario:
1. Breakdown below 1.17061 (mid-level support) could trigger acceleration to the downside.
2. 1.16500 and 1.16308 are ideal short targets before reevaluation for continuation or bounce.

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🛑 Risk Management Tips:
• Consider SL above 1.17800 (previous high).
• Monitor for confirmation before entry (e.g., bearish candle close below 1.17000).
• Adjust size and risk-reward ratio appropriately.