EURUSD has encountered a potential roadblock in its recent ascent. This analysis examines the technical situation and explores potential scenarios for the currency pair.
EURUSD Meets Resistance:
- Rally Stalls at Trend Line: EURUSD recently touched the resistance of the falling trend line on the 4-hour chart. This trend line has been a significant hurdle, and the price has now pulled back from its high of 1.0884.
Uptrend in Question:
- Retest Likely: Given the pullback, another attempt to retest the trend line resistance is a likely scenario.
- Trend Line Break as Confirmation: A decisive breakthrough above the trend line resistance would be a significant bullish development. This move could indicate a completion of the downside move from 1.0981 and a potential resumption of the uptrend.
- Upside Targets: In this scenario, the next potential target zones to watch could be around 1.0940 and even higher at the previous high of 1.0981.
Downtrend Scenario if Resistance Holds:
- Correction or Downtrend Continuation: If the price fails to break above the trend line resistance, the recent bounce from 1.0724 could be interpreted as a correction within the broader downtrend.
- Downside Risk Persists: In this scenario, the downtrend could resume after the correction phase. One more potential fall towards the 1.0700 target zone could still be on the table.
Support Levels to Watch:
- 1.0790 Initial Support: The immediate support level to monitor is at 1.0790. A breakdown below this level could indicate further weakness and a potential retest of the 1.0700 area.
Overall Sentiment:
The technical outlook for EURUSD has become uncertain in the short term. The pullback after touching resistance raises concerns about the strength of the uptrend. A breakout above the trend line resistance is crucial for uptrend confirmation. Conversely, a failure to break above could signal a continuation of the downtrend. Close monitoring of price action around these key levels will be essential in determining the future direction of EURUSD.