EURUSD Forex Forecast – Descending Channel Setup

EURUSD Forex Forecast - Descending Channel SetupEURUSD has been trending lower on its 1-hour time frame, moving inside a descending channel connecting the latest highs and lows. Price appears to be on its way to test the resistance once more after the channel support held.
Applying the Fib tool on the latest swing high and low shows that the 61.8% level coincides with the top of the range near the 1.1200 major psychological level. This also lines up with a broken short-term support level and the 100 SMA dynamic resistance.
This short-term moving average is below the longer-term 200 SMA, confirming that the path of least resistance is still to the downside. If the resistance area holds, EURUSD could revisit the lows at 1.1135 or form new ones closer to the 1.1100 major psychological level. Stochastic and RSI are both indicating overbought conditions so sellers could take control soon.
Data from the euro zone has been mixed this week, as the German and euro zone ZEW economic sentiment figures both missed expectations and indicated weaker optimism while the German Ifo business climate reading printed stronger than expected results.
As for the dollar, the lack of top-tier events has left it sensitive to risk sentiment. For today, though, the US durable goods orders report is due. Analysts are expecting to see 0.3% gains for both the headline and core figures. Initial jobless claims data is also due today. This pair could see more action on Friday, as the US preliminary GDP reading is up for release and an upgrade from 0.5% to 0.8% is eyed.

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.