EUR/USD is moving in an uptrend, as seen on its 1-hour time frame. It is making a test of the rising trend line connecting the lows of the price while stochastic is in the oversold zone.
A bounce might take place soon, possibly when stochastic crosses up and indicates buying momentum. If that happens, EUR/USD could make its way back to its former highs near the 1.4000 major psychological resistance.
On the other hand, a breakdown might indicate that the uptrend is going to reverse. After all, the latest drop has been very sharp and another selloff could be in the cards. If that’s the case, EUR/USD could make its way back to the next visible support zone.
Going long at market with a tight stop below the trend line or the 1.3800 mark could yield a good return on risk if one aims for the 1.4000 area.
By Kate Curtis from Trader’s Way