Imagine betting against a roaring EUR/USD uptrend, only to watch it stomp back stronger— that's the brutal reality of trend reversals that keeps traders up at night! But here's where it gets controversial: are these massive moves really about 'value' like hunting for bargains at the store, or is there something deeper in the market's psychology that traps even seasoned pros? Let's dive into this guide on how long-term trends in EUR/USD flip, breaking it down step by step so beginners can grasp the complexities without feeling overwhelmed. We'll explore why fading trends feels natural yet often backfires, and uncover the eye-opening twists in one of 2025's biggest forex stories.
Published: October 13, 2025 at 20:21 UTC
It's only human for traders to push back against the current trend, right? We're wired to seek out value—think of it as the same instinct that drives us to scan store shelves for deals. When prices spike after a wild upward climb, we assume they're overvalued and ripe for a fall. Conversely, rock-bottom prices following a sharp dip scream 'bargain' to our economic brains. This is classic Homo Economicus behavior: rational, value-hunting decision-making. But markets? They're not always so straightforward. That 'discount' mentality doesn't always translate to profitable trades. Prices can stay inflated longer than we think, or plunge deeper before rebounding. It's a reminder that forex isn't a supermarket—it's a battlefield of emotions, algorithms, and global forces where 'value' is subjective and often misleading.
Take the spectacular surge in EUR/USD from January to July 1, 2025. The pair rocketed from around 1.01—teetering on parity with the dollar—to a lofty 1.18. It was a breathtaking ascent, full of momentum that made reversal bets seem like a sure thing. And initially, those betting on a downturn were correct: the pair nosedived by a staggering 4,000 pips in just that one month. But for those who expected a full-blown downtrend to take hold, it was a rude awakening—a market slap in the face, if you will. Instead of collapsing further, EUR/USD consolidated from late July through the September FOMC meeting, eventually smashing to new yearly highs, currently sitting at 1.19188 as of our analysis.
And this is the part most people miss: why do powerful uptrends keep charging ahead? It's because banks and trading algorithms are constantly scanning for re-entry points. These heavy hitters generate strong buying flows that create periods of sideways movement (consolidation) before pushing the trend onward. It's like a freight train slowing down at a station but never fully stopping—it's gathering steam for the next leg.
Fast-forward to now, and we're seeing signs of change: a bearish divergence forming a double-top at those fresh yearly highs, followed by what looks like the start of a prolonged correction. The takeaway? Robust trends rarely reverse in one swift strike. Double tops—those classic technical patterns where price hits the same high twice before dropping—tend to be more reliable reversal signals across all chart timeframes. For beginners, think of a double top as a mountain peak that price climbs twice, only to tumble down the other side. It's a visual cue of weakening momentum, often confirmed by indicators like oscillators showing divergence (where price rises but momentum stalls).
To illustrate this, let's walk through a detailed multi-timeframe analysis of EUR/USD. We'll break it down chart by chart, explaining the key patterns and why they matter, so even if you're new to forex, you can follow along without technical jargon overwhelming you.
EUR/USD Multi-Timeframe Analysis
Weekly Chart
[Image: EUR/USD Weekly Chart, October 13, 2025 – Source: TradingView]
The 2025 ascent culminated in a two-wave peak, paving the way for the current corrective phase. Looking at the chart, it's clear how the uptrend dominated the first half of the year, with an almost unbroken climb delivering a +16.40% gain within a narrow bullish channel. The critical insight here is the momentum failure in the second wave. Unlike the first steady push to highs, this final surge was lightning-fast and lacked follow-through.
For context, if you missed the action that forged the 2025 peak, picture this: just before the September FOMC meeting, a sudden dollar strength spike on thin volume created that 1.19188 wick—essentially a false breakout that fizzled out. This rapid, inconsistent move (short on time and volume) is textbook for forming divergences, and this case was no different. Post-divergence, traders sought confirmation through price action: a long-top doji candle (a candlestick showing indecision) gave way to a lower close the following week, finally breaching the steep uptrend line from 2025. It's a perfect example of how markets whisper reversals before shouting them—patience and confirmation are key.
Daily Chart
[Image: EUR/USD Daily Chart, October 13, 2025 – Source: TradingView]
Zooming in, we can see how September 17's extreme highs triggered sharp rejections. The price action has since carved out a downward-sloping channel, breaking through levels more methodically than the abrupt July correction. Speaking of that initial 4,000-pip drop in late July, remember: sudden trend reversals often spark aggressive dip-buying as panicked sellers bail and bargain hunters jump in.
But here's where it gets controversial: are these 'emergency selloffs'—those steep, squeeze-like crashes—truly unsustainable, or do they sometimes mark lasting shifts? They do signal changing sentiment, scaring out leveraged traders who amplify the move, but if the underlying trend rebounds (as it did here from August to mid-September), the price path can get murky and unpredictable. Downward channels like this one tend to be tougher to break because their steady, step-by-step declines build resilience—unlike volatile plunges that can reverse on a dime.
4-Hour Chart and Key Levels
[Image: EUR/USD 4H Chart, October 13, 2025 – Source: TradingView]
Watch closely for a bearish crossover between the 4-hour 50-period and 200-period moving averages—a signal of shorter-term momentum turning against the longer-term trend. Bulls would gain a crucial victory with a bounce off the immediate support level, particularly around the downward channel's midline, which often acts as a pivot point for testing strength.
Conversely, if price slices below that support, it could fuel an extended selloff. For practical trading, here are the levels to monitor:
Resistance Levels:
- 1.1630 (Intermediate Pivot)
- 1.1750 (Mini-Resistance)
- 1.18 to 1.1830 (Main Resistance)
- 1.19188 (2025 Highs)
- 1.19 to 1.1950 (September 2021 Highs Zone)
Support Levels:
- 1.1560 to 1.16 (Immediate Support)
- 1.1470 (Pivotal Support)
- 1.1350 to 1.14 (Main Support)
- 1.13916 (August 1st Lows)
Trade safely out there—forex can be thrilling, but risk management is your best friend!
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About the Author
Elior Manier (https://www.marketpulse.com/analysts/elior-manier/)
Market Analyst
Elior Manier brings over seven years of hands-on experience in financial markets to our team. Starting in 2018, he's immersed himself in charting, trading, and dissecting market behaviors, fueled by a genuine passion for understanding the forces at play. His deep insight into geopolitical and macroeconomic factors helps him evaluate how breaking news, sentiment shifts, and key economic data impact trading dynamics.
As a well-rounded analyst, Elior blends geopolitical and technical analysis seamlessly, delivering clear, actionable perspectives. Before joining us, he sharpened his skills as a Fixed Income Trader and Market Analyst at the Montreal Exchange.
What do you think about EUR/USD's resilience in 2025? Is fading trends a fool's errand, or can smart traders still profit from counter-moves? Do algorithms really dictate reversals more than human psychology? Share your takes in the comments—I'm curious to hear agreements, disagreements, or even a controversial counterpoint like whether technical patterns like double tops are overhyped in today's high-speed markets!
