EURUSD Tumbles Below Uptrend Line: Reversal or Retest?

EURUSD has taken a sharp turn lower, breaking below the rising trend line that had been guiding its recent ascent on the 4-hour chart. This raises concerns about a potential trend reversal, but it’s crucial to analyze the situation further before drawing conclusions.

Downside Risks: Potential Support Levels

  • 1.0789 Support Test: The immediate support level to watch is 1.0789. If the price falls below this level, it could indicate a continuation of the downtrend and lead to a test of the next support level at 1.0750.
  • 1.0750 and 1.0694: Lower Support Awaits: A further decline below 1.0750 could open the door for a drop towards the previous low of 1.0694, solidifying the downtrend.

Upside Potential: Resistance Levels to Consider

While the current momentum favors bears, there are still possibilities for a bounce:

  • 1.0840 Initial Resistance: If the bulls manage to regain control and push the price above 1.0840, it could signal a potential short-term reversal.
  • 1.0887 and 1.0950: Resistance Hurdles: Overcoming 1.0887 resistance could further strengthen the bullish case and pave the way for a rise towards the 1.0950 area.

Overall Sentiment:

The breakdown below the trend line is a bearish development for EURUSD. However, the presence of support levels and the possibility of a bounce cannot be ignored. The price action around the mentioned support and resistance zones will be crucial in determining the pair’s next move.