The EUR/USD currency pair is once again facing the resistance of the falling trend line on the 4-hour chart. This trend line has proven to be a significant hurdle for the pair, and its ability to break through this resistance will likely determine the near-term direction.
As long as the trend line resistance holds firm, the recent rise from the 1.0600 level could be viewed as a corrective move within the broader downtrend that commenced from the 1.0981 high. In this scenario, another decline in the EUR/USD cannot be ruled out after the current correction phase.
On the downside, the initial support for the EUR/USD is situated at the 1.0750 level. If the pair fails to hold above this support, it could potentially lead to a breakdown towards the next support level at 1.0723.
A breach of the 1.0723 support could potentially signal that the downside move from the 1.0981 high has resumed. In such a case, the next target for the bears would be the 1.0650 area, followed by the crucial 1.0600 zone.
However, if the EUR/USD manages to gather enough bullish momentum and decisively break through the falling trend line resistance, it could potentially trigger further upside momentum. The immediate resistance after the trend line lies at the 1.0811 level.
A sustained move above the 1.0811 resistance would confirm that the downside move from the 1.0981 high has likely completed at the 1.0600 low. This development could potentially pave the way for a more significant rally, with the next targets for the bulls being the 1.0860 level, followed by the psychologically important 1.1000 zone.
In summary, the EUR/USD is currently at a critical juncture, with the falling trend line resistance on the 4-hour chart acting as a significant hurdle. A failure to break through this resistance could potentially lead to another decline, potentially targeting the 1.0650 and 1.0600 levels. Conversely, a decisive breakout above the trend line resistance could potentially signal a broader reversal, with the 1.0860 and 1.1000 levels serving as potential upside targets.
Traders and investors are advised to closely monitor the price action around these crucial levels to gauge the potential direction of the EUR/USD in the coming days.