EURUSD: Possible Breakout of Downtrend Line?
On the 1-hour chart for EUR/USD, the price is currently testing a descending trendline that has served as dynamic resistance over the past few days. After bouncing off a support level around 1.0453, the pair displays signs of strength and is nearing a crucial decision-making zone. The horizontal resistance at 1.0490 aligns with the trendline, and breaking through this area could signal a potential short-term bullish reversal.
A potential buying opportunity may arise if EUR/USD successfully breaks above the downtrend line and subsequently retests the broken level, which could act as support.
Expected Pattern: Breakout followed by Pullback.
Buy Scenario:
Alternative Scenario: Bearish Continuation
If the price fails to surpass the 1.0490 resistance and drops below 1.0475, a retest of the support at 1.0450 is probable.
In Summary
The primary scenario indicates a bullish outlook if EUR/USD breaks and holds above 1.0490, with potential targets at 1.0560 and 1.0600. However, traders should keep an eye on price behavior at the resistance level, as a rejection may trigger renewed selling pressure.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and if you can afford the high risk of losing your money. Past performance is not indicative of future results. Investment values may fluctuate, and you may not recover your initial investment. This content is not intended for residents of the UK.
A potential buying opportunity may arise if EUR/USD successfully breaks above the downtrend line and subsequently retests the broken level, which could act as support.
Expected Pattern: Breakout followed by Pullback.
Buy Scenario:
- Confirmation: A breakout above 1.0490 with a strong close, followed by a pullback to retest this level as support.
- Entry Point: During the pullback, near the 1.0490 area (previous resistance potentially turning into support).
- Stop Loss: Set below 1.0475 to protect against false breakouts.
- Primary Target (TP1): 1.0560, a horizontal resistance (approximately 70 pips gain).
- Secondary Target (TP2): 1.0600, a psychological level and key resistance (approximately 110 pips gain).
Alternative Scenario: Bearish Continuation
If the price fails to surpass the 1.0490 resistance and drops below 1.0475, a retest of the support at 1.0450 is probable.
- Possible Sell: Close below 1.0453, targeting 1.0430 or lower.
In Summary
The primary scenario indicates a bullish outlook if EUR/USD breaks and holds above 1.0490, with potential targets at 1.0560 and 1.0600. However, traders should keep an eye on price behavior at the resistance level, as a rejection may trigger renewed selling pressure.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and if you can afford the high risk of losing your money. Past performance is not indicative of future results. Investment values may fluctuate, and you may not recover your initial investment. This content is not intended for residents of the UK.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.