EUR/USD Technical Highlights:
- EUR/USD coming off the 11121 resistance level
- Big support levels via a pair of long-term trend-lines
- Ascending wedge pattern may develop soon
The EUR/USD is coming off stiff resistance right around 11121 (max high = 11137). It was first support in January and again very short-term support on Feb 24 before turning into resistance twice in the last week. Weakness is bringing into play short-term support via a trend-line off the recent low.
In total, the recent price action is beginning to carve out an ascending wedge at resistance. And with this taking shape within the context of a broader downtrend it would suggest that recent strength is nothing more than a corrective bounce before another leg lower.
But even if the wedge does come to fruition and/or the trend-line off the low breaks, there is one caveat to the trend continuation scenario. There are a pair of major long-term trend-lines in the area. One is from 2001, which actually has been breached a bit and is in the middle of current price action.
The other is a line off the 2016 low that marks the exact low we just saw last week. This is the line of primary focus on this end, as it is the lower of the two thresholds and has held with such precision. From a macro tech perspective, as long as price stays above then the outlook is neutral at worst. Break below, and things could really start to get interesting on the downside.
Before getting ahead of ourselves on the bigger levels/lines, the trend-line off last week’s low and the possibility of a wedge forming is the primary focus for now. Should it lead to a downside break, then we will see how price behaves at 10806. If we see the wedge lead to a breakout above resistance (11137 max threshold), then we could see EUR/USD squeeze higher with some force.
Either way, there could be some good movement here shortly once we gain a bit more clarity on the near-term price action.
EUR/USD Weekly Chart
EUR/USD Daily Chart
EUR/USD 4-hr Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
