The support level looks too fragile to hold the price
The current price action of EURUSD suggests that it is moving within a bearish channel. This channel indicates a downward trend in the pair’s value. However, an important observation is that the price is currently situated on a strong support zone. This support zone appears to be holding a significant level of demand for the pair, indicating potential buying interest.
Chart Notes:
• Chart time-zone is UTC (+03:00)
• Candles’ time-frame is 4h.
Additionally, it is worth noting that the Relative Strength Index (RSI) is approaching the oversold zone. This indicates that the selling pressure may be nearing exhaustion and a potential reversal or a period of consolidation could be on the horizon. Based on this analysis, traders may consider waiting for the price to break above the bearish trend line. A breakout above this trend line could signify a shift in the market sentiment and the potential beginning of an upward movement. However, it is advisable to exercise caution and wait for a retest of the static support zone after the breakout. Once the price has successfully retested the support zone and confirmed it as a level of resistance-turned-support, traders may consider entering long positions. This strategy allows for confirmation of the support zone’s strength and increases the likelihood of a favorable trade outcome. As always, it is essential for traders to conduct their own analysis, consider risk management strategies, and stay updated with relevant market news and events that may impact the EURUSD pair.
• DISCLAIMER: Please note that the above analysis is not an investment suggestion by “Capitalcore Ltd”. This post has been published only for educational purposes.