EURUSD pair has recently captured the attention of traders and analysts alike as it breaks above the 1.0864 resistance level. This development has propelled the pair towards a crucial battleground – the resistance of the falling trend line on the 4-hour chart.
Potential Bullish Reversal
A decisive breakthrough of the falling trend line resistance could potentially signal a significant shift in the pair’s trajectory. Such a move would indicate that the downside move from the 1.0981 level has completed at the 1.0724 mark, potentially paving the way for a bullish reversal.
In the event of a successful breach, the next target area for the bulls would be the 1.0940 level, followed by a potential test of the 1.0981 previous high.
Consolidation or Correction?
However, the technical landscape remains uncertain, as the pair continues to face the formidable resistance of the falling trend line. As long as this level holds firm, the recent bounce from 1.0724 could potentially be interpreted as a correction within the broader downtrend that originated from the 1.0981 level.
If the trend line resistance remains intact, traders may witness another fall towards the 1.0700 level after the current corrective phase.
Initial Support and Downside Risks
While the focus remains on the potential for a bullish reversal, traders will be closely monitoring the initial support level at 1.0790. A breakdown below this level could potentially trigger another bout of selling pressure, potentially pushing the pair towards the 1.0700 level once again.
Key Levels to Watch
In this volatile phase, traders will be keeping a close eye on the following key levels:
- Falling trend line (critical resistance)
- 1.0940 (potential upside target)
- 1.0981 (previous high)
- 1.0790 (initial support)
- 1.0700 (potential downside target)
The price action around these levels will be instrumental in determining the pair’s next move and the potential for a bullish reversal, a continuation of the downtrend, or a prolonged consolidation phase.