The EURUSD pair has recently experienced a sharp downturn, capturing the attention of traders and analysts alike. The pair has plummeted from the 1.0942 level to as low as 1.0801, breaching the critical 1.0834 support level in the process.
Downside Momentum Intensifies
The pair’s decisive break below the 1.0834 support level has fueled concerns that the bearish sentiment surrounding the EURUSD may intensify further. After a potential minor consolidation phase, traders believe that a breakdown below the 1.0801 level could trigger further downside momentum, with the pair potentially targeting the 1.0720 area.
Resistance Levels and Potential Reversal
While the bears currently hold the upper hand, traders will be closely monitoring the initial resistance level at 1.0850. A breakout above this level could potentially bring the price back towards the falling trend line on the 4-hour chart, a crucial battleground for bulls and bears alike.
However, only a decisive break above the falling trend line could signal the completion of the downtrend from the 1.0981 level, potentially paving the way for a bullish reversal.
Key Levels to Watch
In this volatile phase, traders will be keeping a close eye on the following key levels:
- 1.0801 (current support)
- 1.0720 (potential downside target)
- 1.0850 (initial resistance)
- Falling trend line (critical resistance)
The price action around these levels will be instrumental in determining the pair’s next move and the potential for a continuation of the downtrend, a consolidation phase, or a potential reversal.