EUR/USD saw a downswing that stopped riiiight at a key support zone.
Is the pair showing us an opportunity to jump on EUR/USD’s uptrend?
Let’s take a closer look at the 4-hour chart for clues:
EUR/USD: 4-Hour
EUR/USD 4-Hour Forex Chart by TradingView
First, remember that directional biases and volatility conditions for market price are typically driven by fundamentals, and if you haven’t done your fundie homework on the euro or the U.S. dollar yet, then it’s time to do some work by checking out the forex calendar and stay updated on daily fundamental news!
Now, if your research points you to EUR/USD extending its uptrend, then you’ll want to know that EUR/USD is chillin’ around the 1.0900 psychological level. As you can see, 1.0900 is also close to a previous support and resistance area. What’s more, it’s also near the S1 (1.0870) Pivot Point line in the 4-hour time frame!
With Stochastic also hinting that the pair may be “overbought,” EUR/USD’s current levels may draw in buyers who are fans of trend trades.
If EUR/USD sees a few more bullish candlesticks, then the pair may see enough buying pressure to hit its previous highs near the R1 (1.0980) Pivot Point or the 1.1000 psychological level.
Of course, it’s also possible for EUR/USD to turn lower and see a bearish reversal instead. After all, Fed Chairman Powell’s closely watched speech scheduled later today could still turn hawkish and encourage USD demand.
If today’s market themes push traders into buying USD, then EUR/USD may draw in enough sellers to force a downside breakout.
Look out for a clear break of the S1 Pivot Point near the 100 SMA. If we do see a downside breakout, then EUR/USD may see enough selling pressure to hit the S2 (1.0800) Pivot Point if not the 1.0750 inflection point closer to the 200 SMA.
Good luck and good trading this one, forex friends!
