EUR/USD has formed lower highs and higher lows inside a symmetrical triangle pattern and is currently testing resistance.
Can it go for a breakout next?
Or will it head back down to test the triangle support again?
EUR/USD: 4-hour
EUR/USD 4-hour Forex Chart by TradingView
Strengthening Fed rate cut expectations have been weighing on the U.S. dollar in the past few days while easing geopolitical tensions between Russia and Ukraine have propped up the euro.
These factors have been enough to lift EUR/USD from its triangle support around S1 (1.1530) all the way up to the top near R1 (1.1640).
Does the pair still have bullish energy left for a break higher?
The 100 SMA is below the 200 SMA for now, but the gap between the indicators has narrowed enough to suggest that an upward moving average crossover could follow.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the U.S dollar and the euro, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
If so, keep an eye out for a rally above the 1.1650 minor psychological handle that could signal buyers have the upper hand, likely aiming for the bullish targets at R2 (1.1680) then R3 (1.1750) next.
On the other hand, reversal candlesticks forming around current levels could mean another move back to near-term support levels such as the pivot point (1.1570) may be in order. Significant downside pressure could take EUR/USD down to the triangle bottom or for a break lower to S2 (1.1460).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.