EUR/USD has been facing significant challenges in its attempts to breach the 1.0900 resistance zone, a critical level that has proven to be a formidable barrier for the bulls. The recent trading activity has shown that even with minor recoveries, the pair struggles to maintain momentum above this threshold. The bears have firmly established their presence, causing the pair to retreat from this resistance, indicating a strong bearish sentiment in the market. This persistent inability to overcome the resistance suggests that traders are cautious, with many anticipating further declines rather than a robust recovery.
ANALYSIS of the 4-hour chart reveals the formation of a connecting trend line that highlights the ongoing struggle between buyers and sellers. The technical indicators suggest that the pair has traded above the 23.6% Fibonacci retracement level, which typically signifies a potential reversal or support. However, the reality is that the bears remain active, particularly near the 1.0900 level. This level acts as a psychological barrier, and with the current trading below the 100 and 200 simple moving averages, the outlook remains bearish. As we observe the price action, it becomes evident that the downtrend is still intact.
As EUR/USD continues to decline, immediate support is found near the 1.0780 level, which may provide a temporary reprieve for the pair. However, if the downward pressure persists, the next key support level is positioned at 1.0760. This area is critical as it could lead to a more significant decline if breached. Traders are closely monitoring these levels, as any further losses could push the pair towards the 1.0720 level. The market sentiment appears to favor the bears, with many anticipating a test of these lower support levels.
The upside potential for EUR/USD seems limited at this juncture, with resistance firmly established at the 1.0900 level. A close examination of the price action indicates that any upward movements are likely to encounter substantial selling pressure. The first key resistance is identified near the 1.0920 level. Should the pair manage to close above this level, it could signal a potential shift in momentum and open the door for further gains. However, until that occurs, the prevailing sentiment remains bearish, with traders remaining cautious about any long positions.
In conclusion, the EUR/USD pair is currently caught in a downtrend, with bears firmly in control. The resistance at 1.0900 continues to thwart any bullish attempts, while the support levels below are critical to monitor as the pair seeks to find its footing. Traders should remain vigilant as the market dynamics unfold, keeping an eye on both resistance and support levels. The outlook for EUR/USD remains bearish, and any significant developments could lead to increased volatility in the coming sessions.