EURUSD faces a critical decision point, hovering near the key resistance level of 1.0805. Let’s dissect the technicals to understand whether a breakout or a retreat within the established downtrend is more likely.
Upside Potential: Breakout or False Hope?
- 1.0805 Resistance: Surpassing this hurdle could trigger a further rally, potentially aiming to challenge the descending trend line resistance on the 4-hour chart.
- Trend Line Resistance: However, as long as this trend line remains unbreached, the recent bounce from 1.0694 might be interpreted as a mere consolidation within the ongoing downtrend.
Support Levels to Watch for Downside Continuation
- 1.0730 Initial Support: A breakdown below this level could signal a renewed decline, potentially leading to a retest of the 1.0694 support.
- Further Downside Targets: Breaking below 1.0694 would open the door for falls towards 1.0670 and even 1.0600, further solidifying the downtrend.
Upside Breakthrough: Trend Reversal or Retracement?
- Trend Line Breach: A decisive breakout above the trend line resistance would be a significant development, potentially indicating the completion of the downtrend from 1.1139.
- New Target: In this scenario, the next potential target zone could be around the 1.0900 area.
Overall Sentiment
The near-term direction of EURUSD hinges on the price action around the crucial 1.0805 resistance level. A breakout suggests potential upside and a possible trend reversal, while a decline below reinforces the dominant downtrend. Monitoring the support and resistance levels mentioned above will be vital in confirming the pair’s next move.