EURUSD Climbs: Uptrend Resumption or Bullish Correction?

EURUSD has displayed renewed buying pressure, breaking above key resistance. This analysis examines the technical situation and explores potential scenarios for the currency pair.

EURUSD Stages Rally:

  • Upside Move Gains Momentum: EURUSD has built on its upward momentum, reaching a high of 1.0752. This move extends the rally that began at 1.0600.

Uptrend or Correction? Price Channel in Focus:

  • Rising Price Channel as Indicator: The key factor to consider is the rising price channel on the 4-hour chart. As long as the price remains within this channel, the upside move could be expected to continue.
  • Upside Targets: The next potential target zones to watch are 1.0800 and potentially the falling trend line on the 4-hour chart (if the uptrend strengthens).

Downtrend Shadow Looms:

  • Falling Trend Line Resistance: It’s important to remember the downtrend that began at 1.0981. Although EURUSD is rallying, as long as the falling trend line resistance holds, the current rise from 1.0600 could still be interpreted as a correction within the longer-term downtrend.
  • Downtrend Resumption Risk: If the correction scenario holds true, then another decline towards 1.0500 after the rally could be possible.

Support Levels to Consider:

  • 1.0700 Initial Support: The initial support level to monitor is at 1.0700.
  • Price Channel Support: A more significant level to watch is the bottom of the rising price channel on the 4-hour chart. A break below this support would suggest a weaker uptrend and could trigger a further downside move.
  • 1.0600 Crucial Support: The key support level remains at 1.0600. A decline below this level would signal a potential resumption of the downtrend from 1.0981. In this scenario, the next target zone could be around the 1.0500 area.

Overall Sentiment:

The technical outlook for EURUSD is uncertain in the short term. The recent rally suggests a potential uptrend resumption, but confirmation depends on the price action around the key support levels and the boundaries of the rising price channel. Close monitoring of these levels is crucial to determine if the uptrend holds or if a correction unfolds within the downtrend.