The EUR/USD pair has recently broken below the rising price channel visible on the 4-hour chart, suggesting a possible shift in the short-term trend. Let’s break down the key levels and potential scenarios for traders to watch.
Key Support Level in Focus
The pair is currently testing a crucial support level at 1.0871. This level is pivotal for determining the next directional move.
Bearish Scenario
If EUR/USD breaks below the 1.0871 support, it could signal the completion of the upward move that began at 1.0665 and peaked at 1.0948. In this case, traders should watch for the following targets:
- Initial target: 1.0830
- Secondary target: 1.0800 area
Bullish Scenario
However, the broader uptrend may still be intact as long as the 1.0800 support holds. If this level remains unbroken, we could see:
- A potential resumption of the upward move from 1.0665
- Another push towards the psychologically important 1.1000 level
Key Resistance Levels
For bulls, here are the resistance levels to watch:
- Initial resistance: 1.0910
- Previous high: 1.0948
- Major target: 1.1000
A break above 1.0910 could trigger a rally to retest the previous high at 1.0948. If the pair manages to surpass this level, the next major target would be 1.1000.
Conclusion
The EUR/USD pair is at a critical juncture. The breakdown from the rising channel suggests potential bearish pressure, but the overall uptrend remains intact above 1.0800. Traders should closely monitor price action around the key 1.0871 support level for clues about the pair’s next directional move.Remember to use proper risk management techniques and consider multiple timeframes when making trading decisions based on this analysis.