The EUR/USD is coiling and waiting for a breakout. Let’s take a look at the charts to assess the potential breakout.
The 4H chart shows the market pulling back to 1.1423 after marking a new low on the year around 1.11. Then, price started to coil. We can see the bearish bias and bearish momentum being preserved so far, so the preference is a breakout to the downside. A break below 1.1260 opens up the 1.11 area, with risk of breaking towards the 1.10 handle.
A break above 1.1423 however puts EUR/USD above last week’s resistance pivot and above a falling speedline from December. This would open up only a short-term bullish outlook within a medium-term bearish one that would still be intact. In this scenario, look for resistance in the 1.15-1.1550 area.
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