EURUSD has experienced a technical setback, breaching the lower boundary of a key indicator on its 4-hour chart. This analysis dives into the technical situation and explores potential scenarios for the currency pair.
Uptrend Faces a Hurdle:
- Channel Support Breached: EURUSD has broken below the bottom of the rising price channel on the 4-hour chart. This technical pattern had been guiding the uptrend since 1.0694.
- 1.0865 Support in Focus: The currency pair is now facing the next critical support level at 1.0865.
Potential Direction Shifts:
- Downside Confirmation: A breakdown below 1.0865 support would signal a weakening of the uptrend and potentially a trend reversal. In this scenario, the next target could be 1.0800, followed by a deeper decline towards the psychological level of 1.0700.
- Uptrend Resumption: Conversely, if EURUSD manages to find support at 1.0865 and bounce back, it could indicate a continuation of the uptrend.
Levels to Watch for a Rebound:
- 1.0915 Initial Resistance: The initial hurdle to overcome for the bulls is the resistance level at 1.0915.
- Regaining Lost Ground: A successful breakout above 1.0915 could trigger another rise to test the previous high at 1.0981. Overcoming this resistance level would open the door for a potential climb towards the 1.1050 area.
Overall Sentiment:
The technical outlook for EURUSD hinges on the price action around 1.0865. A breakdown below this level suggests a downside continuation. Conversely, a bounce and a climb above 1.0915 would favor the bulls and signal a potential uptrend resumption. Close monitoring of these key levels is essential to determine the future direction of EURUSD.