The Euro continues to be resilient and EURUSD still can’t start a solid downtrend. Notably, the blue channel on the chart is important at the moment as it is sloped upwards and it’s very close to the resistance zone of the broken 8-month channel. So, pay attention to how price action behaves around these levels (1.1350 – 1.1450). This is a strong resistance zone, so a large buying force will be needed to push the price through it. But, also sellers are not very aggressive at the moment so the pair can’t break lower either. We can say that EURUSD is in an equilibrium state hence the prolonged sideways price action.
Technically, we should wait for a downside breakout of the blue channel before entering short positions from the daily timeframe.
EURUSD Daily chart – Very resilient price action!
Again, here on the 4h chart, the resilience of the Euro is visible. Last week we noted that the high around 1.1250 needs to hold for the downtrend to stay intact. This did not happen and EURUSD moved higher forming a new bullish channel on the 4h chart. It’s difficult to say where the pair will go next, so it will be best to trade it from technical support and resistance levels.
A particularly good level to sell the pair looks to be 1.1330 where the weekly and monthly pivot resistances 1 meet, and in addition several previous highs were formed at or close to this level.
Buying at the support line of the blue channel and selling at the resistance line is also a valid strategy in this environment.
EURUSD 4h chart – Watch the blue channel!
The dotted blue line is the support line of the blue channel on the daily timeframe. All we can say for the 1h chart is to watch the downward trendline drawn on the chart. A break above it will be bullish for the pair, and if it holds and EURUSD moves lower then a possible downward breakout of the channel (blue) on the daily timeframe will be in play.
EURUSD 1h chart – It will breakout either way!
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