Euro Pullback Tests Key Channel Support Against US Dollar

The EURUSD currency pair’s pullback from the 1.0894 high has extended to as low as 1.0817, facing the support of the rising price channel visible on the 4-hour chart. This area will likely determine the pair’s near-term directional bias.

Consolidation Within Uptrend

As long as the EURUSD remains above the rising channel support, the current pullback from 1.0894 can be viewed as a consolidation phase within the broader uptrend that originated from the 1.0600 low.In this scenario, another rally toward the key 1.1000 handle could potentially unfold for the pair after the current consolidation period.

Key Resistance Levels

In the near-term, the first level of resistance to watch on the topside is the 1.0860 area. A breakout above this level could potentially trigger an upside move to retest the 1.0894 previous high resistance.If buyers can push the EURUSD above 1.0894, the next key target would be the 1.1000 psychological resistance zone.

Downside Risks on Channel Break

On the flip side, a breakdown below the rising channel support would likely signal that the upside move from 1.0600 has completed at the 1.0894 high.In this scenario, the first level of support to watch would be the 1.0800 area. A move below 1.0800 would open the door for a potential decline toward the 1.0725 support region.

Key Levels to Watch

For now, the key levels to watch in the EURUSD are the rising channel support, the 1.0860 and 1.0894 resistance levels, along with the 1.0800 and 1.0725 support areas.

As long as the pair remains within the confines of the rising price channel, the overall technical bias will remain tilted to the upside, with the potential for a continuation move toward the 1.1000 target after the current consolidation.

However, a breakdown below channel support would be a significant technical event, likely opening the door for a deeper pullback toward the 1.0725 support zone.

The EURUSD finds itself at an important technical juncture, with the rising channel support being the key level to watch. The direction of the next big move will likely be determined by the pair’s ability, or inability, to hold above this trendline in the sessions ahead.