EURUSD has experienced a technical shift, raising questions about the continuation of the uptrend. This analysis examines the recent price action and explores potential scenarios for the currency pair.
Uptrend Loses Momentum:
- Trend Line Broken: EURUSD decisively fell below the rising trend line visible on the 4-hour chart. This technical indicator suggests a weakening of the uptrend that began at 1.0694.
- Consolidation Phase Likely: The break below the trend line indicates a potential shift towards a consolidation phase rather than a sustained upward movement.
Rangebound Trading Expected:
- 1.0855 and 1.0981 as Trading Range: In the near future, we might see range-bound trading between 1.0855 as support and 1.0981 as resistance. This sideways movement suggests a pause in the uptrend as bulls and bears attempt to establish control.
Key Levels to Watch:
- 1.0855 Support Crucial: The critical level to watch is 1.0855. If this support holds, it reinforces the bullish case and indicates a possible resumption of the uptrend from 1.0694. A further rise towards 1.1050 remains achievable after a breakout from this consolidation phase.
- 1.0700 Next Support Level: Conversely, a breakdown below 1.0855 support would suggest a weaker uptrend and a potential trend reversal. This scenario could see the price fall further towards the psychologically significant level of 1.0700.
Overall Sentiment:
The technical outlook for EURUSD has become uncertain. While the longer-term uptrend may not be entirely negated, the recent price action suggests a pause or a potential correction. Close attention should be paid to the price action around the mentioned support and resistance levels to determine the future direction of EURUSD.