Yesterday, 06:14 AM
EUR/USD: Bullish Continuation or Bearish Reversal?
On longer timeframes, such as the weekly chart, the overall trend remains bullish yet appears fragile. Currently, buyers are attempting to retest and breach a significant bearish trendline.
The formation of a Shooting Star candlestick pattern two weeks ago signaled a temporary retreat by buyers and a failure to invalidate the bearish trendline. However, price action suggests a renewed momentum to retest this critical resistance factor.
Technically, the pair is currently situated at a pivotal juncture with the potential for a breakout in either direction. The catalyst for the next directional move is likely to be the release of today's economic data for the US Dollar.
On shorter timeframes, including the Daily and H4 charts, the dominant trend remains bullish. The price is currently reacting to the key resistance level of 1.19200, which has capped upside momentum over the past two days. A breakout and consolidation above this level would reinforce the bullish signal, with buyers potentially targeting the 1.20000 level.
Conversely, in a bearish scenario, as long as the price remains consolidated below the 1.19200 threshold, downside targets of 1.18400 and 1.17900 will be in focus. Crucially, this zone shows confluence with the completion of a Bearish AB=CD Harmonic Pattern (featuring ideal ratios of 61.8% and 161.8%) on the weekly chart. Should positive economic data for the USD be released, this harmonic structure could serve as a valid technical setup, thereby increasing the probability of a bearish reversal.