EURUSD Technical Analysis: Sharp Drop Breaks Support, Downtrend Remains

The EURUSD pair experienced a sudden reversal after reaching the upper end of its falling price channel. Let’s dive into the technical details to understand what it means for the pair’s future direction.

Sharp Drop and Support Break

  • EURUSD reached the top of its 4-hour chart falling channel at 1.0897 but then dropped sharply.
  • The pair broke below the crucial support level of 1.0779, reaching a low of 1.0767.
  • This sharp decline confirms that the downtrend initiated at 1.1139 remains in play.

Potential Downside Target

  • As long as the price remains within the falling channel, a further decline can be expected.
  • The next potential support level to watch is at 1.0723, which coincides with the low from December 8th, 2023.

Immediate Resistance and Key Turning Point

  • Immediate resistance for a potential bounce is now at 1.0830.
  • A break above this level could trigger a temporary rise towards the top of the price channel.
  • However, the key resistance to watch is now at 1.0897, the point where the recent drop started.
  • A breakout above 1.0897 would signal a potential reversal of the downtrend.
  • In such a scenario, the pair could face further resistance at 1.0932 and then at 1.0998.

Overall Sentiment

The technical analysis suggests that EURUSD might continue its downward trajectory within the falling channel. The key level to watch for a potential trend reversal is 1.0897. Breaking above this point could indicate a bullish shift, while staying below suggests the downtrend might extend towards 1.0723.