EUR/USD is poised for further declines as bearish momentum continues to build, with key technical studies suggesting increased selling pressure could emerge.

The pair fell to a fresh 1-1/2-month low Wednesday, even in the face of improved risk sentiment, which typically supports riskier assets. However, this environment has not translated into strength for the euro, as multiple bearish indicators remain in play.

Both daily and monthly RSI readings are declining and not yet in oversold territory, indicating that downward momentum persists. EUR/USD is trading below former support levels, which now act as resistance in the 1.1650-1.1680 range, alongside a slew of consistently declining moving averages across several time frames.

The development of a potential head-and-shoulders topping pattern on the monthly charts along with contracting 15-month Bollinger bands raises concerns about the sustainability of the current uptrend that began in early 2025.

The recent decline from the May 6 high has left the uptrend line from the March 16 low vulnerable. If this support line breaks, attention will turn to the 1.1450-1.1500 zone, where the neckline of the head and shoulders pattern resides. A breach of this neckline could unleash significant bearish pressure, potentially driving EUR/USD towards the 1.0900-1.1000 area.
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(Christopher Romano is a Reuters market analyst. The views expressed are his own)