As of today, May 21, 2025, the Forex market is witnessing significant fluctuations influenced by geopolitical events and economic data releases. Technical analysis remains a critical tool for traders aiming to capitalize on these movements by understanding price patterns and market sentiment.

In recent weeks, the focus has shifted towards major currency pairs like EUR/USD and GBP/USD, which are often seen as barometers for broader market trends. Traders are closely watching for shifts in these pairs that might indicate future movements. The use of chart patterns, support and resistance levels, and various technical indicators such as moving averages and RSI (Relative Strength Index) is paramount in gauging market direction.

For EUR/USD, we have observed that it has recently bounced off a strong support level at 1.0780, suggesting that buyers are stepping in at this critical juncture. This area is significant as it represents a price point where buyers historically enter the market with enough conviction to drive the price higher. Conversely, if the price were to break below this level decisively, it could signal further weakness.

On the daily chart, a bearish divergence has been noted, indicating that momentum may be shifting against the current upward trend. Watching this closely can provide insights into potential reversals or continuations in price action. The moving averages, particularly the 50-day and 200-day moving averages, are also offering hints; while they are in a bullish alignment currently, any crossing or failure could raise alarms for traders.

Looking at the 1-week, 1-day, and 4-hour time frames, we can draw some meaningful conclusions about the market:

• The 1-week timeframe shows a bullish trend overall, but there are signs of exhaustion as indicated by the stalling price action.
• The 1-day timeframe has begun to show bearish characteristics, particularly with the recent divergence on the RSI, suggesting potential downward pressure.
• On the 4-hour timeframe, we are experiencing consolidation, representing indecision in the market as traders weigh their options.

From this analysis, potential entry points at the 1-hour timeframe have been identified. The current price movements suggest the following:

• Buy Entry Point: 1.0800, Take Profit Point: 1.0850, Stop Loss Point: 1.0770.
• Sell Entry Point: 1.0780, Take Profit Point: 1.0730, Stop Loss Point: 1.0805.

After evaluating these scenarios, it seems more likely that a Sell scenario could prevail in the short term due to the signals of bearish divergence on the daily timeframe and the overall market dynamics observed. Traders should remain vigilant, as the Forex market can change rapidly, and it is crucial to adapt strategies based on the most recent data.