EURUSD’s price action has shifted, raising questions about the future direction of the currency pair. This analysis examines the technical situation and explores potential scenarios.
EURUSD Falls Below Channel:
- Uptrend Faces Hurdle: A key technical development is the break below the rising price channel on the 4-hour chart. This price channel had been a strong support zone throughout the recent uptrend that began at 1.0600. The break suggests a potential completion of the upside move that reached a high of 1.0752.
Downtrend Resumption or Pullback? Support Levels in Focus:
- Potential Decline: In the coming days, further decline could be expected with the next target zone around the 1.0635 area. A break below this level could trigger a steeper decline towards the crucial support at 1.0600.
- 1.0600 Key Support: A breakdown below 1.0600 would be a significant bearish signal, potentially aiming for the 1.0500 area.
- Initial Resistance: The initial resistance level to watch for a potential rebound is at 1.0695. Only a break above this level could indicate a short-term correction within the broader uptrend, potentially triggering another rise towards the previous high of 1.0752.
Overall Sentiment:
The technical outlook for EURUSD has turned bearish in the short term. The break below the channel support suggests a potential resumption of the downtrend. However, close monitoring of the price action around the key support and resistance levels is crucial to see if the decline extends or if a correction unfolds within the larger trend.