EURUSD Daily Analysis: Bearish Channel Signals Wave (5) Extension Toward Major Support 

Introduction 

EUR/USD continues to trade within a well-defined bearish channel, confirming that sellers remain firmly in control of the longer-term trend. The latest rebound appears to be a corrective move rather than a trend reversal, with price expected to complete Wave (4) before extending lower into Wave (5). 

The overall Elliott Wave structure, together with Fibonacci confluence and the descending channel, continues to favour further downside toward the major support zone. 

Wave (4) Correction Nearing Completion 

Following the completion of Wave (3), EUR/USD is currently undergoing a corrective rebound that is identified as Wave (4). 

This recovery is approaching a key resistance area, where the upper boundary of the bearish channel aligns with the highlighted green resistance zone. The confluence of technical resistance suggests that the current rally may soon lose momentum before the primary downtrend resumes. 

As long as price remains below this resistance, the bearish outlook remains intact. 

Wave (5) Targets Major Support Zone 

Once Wave (4) is completed, EUR/USD is expected to begin Wave (5), extending the current bearish impulse toward the highlighted final target. 

The projected downside target aligns with: 

• The lower boundary of the descending channel.  

• The major historical support zone.  

• Fibonacci 423.6 extension area.  

• The projected completion of the larger Elliott Wave corrective structure labelled (C).  

This combination strengthens the probability of another bearish leg in the coming sessions. 

Awesome Oscillator Signals Momentum Shift 

The Awesome Oscillator previously displayed bullish convergence, indicating weakening bearish momentum during the recent decline. 

However, the indicator is now showing signs that traders should wait for fresh bearish divergence confirmation before expecting the next impulsive decline. Such confirmation would strengthen the probability that Wave (5) is beginning. 

Trading Outlook 

The preferred scenario is for EUR/USD to complete Wave (4) near the highlighted resistance zone before resuming its broader downtrend. 

Traders should monitor bearish reversal candlestick formations, such as Bearish Engulfing or Shooting Star, together with momentum confirmation from the Awesome Oscillator. A rejection from resistance would provide stronger evidence that Wave (5) has started. 

A sustained breakout above the descending channel and resistance zone would invalidate the current bearish wave count and suggest that a larger bullish correction is developing. 

Conclusion 

EUR/USD remains technically bearish while trading inside the descending channel. The current rally is viewed as a corrective Wave (4), with the broader trend still favouring another decline toward the major support area. Unless buyers successfully break above the channel resistance, the probability remains high for Wave (5) to continue driving the market lower in the days ahead.