EURUSD Stages Rebound: Correction or Downtrend Pause?

EURUSD has displayed a promising sign, potentially interrupting its recent decline. This analysis examines the technical situation and explores potential scenarios for the currency pair.

EURUSD Breaches Resistance:

  • Upside Move Suggests Correction: EURUSD has broken above the resistance level at 1.0689 and reached a high of 1.0713. This breakout suggests a potential correction for the downtrend that began at 1.0981.

Upside Potential and Targets:

  • Further Rally Likely: A further rally could be seen in the coming days. The next potential target zone to watch is around the 1.0730 area.
  • Breakout Watch at 1.0730: A decisive break above 1.0730 would be a bullish signal. This breakout could trigger a further upside move towards 1.0800, followed by a potential challenge of the falling trend line on the 4-hour chart. A break above the trend line would suggest a stronger possibility of a trend reversal.

Support Levels to Consider:

  • 1.0655 Initial Support: The initial support level to monitor is at 1.0655.
  • Downtrend Resumption Risk: A breakdown below 1.0655 could indicate a temporary pullback within the correction. However, a further decline below the key support at 1.0600 would be a more bearish sign.
  • 1.0600 Crucial Support: A break below 1.0600 would suggest a resumption of the downtrend from 1.0981. In this scenario, the next potential target zone could be around 1.0550.

Overall Sentiment:

The technical outlook for EURUSD has become uncertain in the short term. The breakout above 1.0689 suggests a potential correction. However, the future direction of the price will depend on how it behaves around the key support and resistance levels. Close monitoring of these levels is essential to determine if the correction extends or if the downtrend resumes.