EUR/USD: Is This Short Term Correction or Fresh Increase?
|Key Highlights
- EUR/USD traded to a new 2020 low at 1.0777 and recently recovered above 1.0820.
- There was a break above a key bearish trend line at 1.0810 on the 4-hours chart.
EUR/USD Technical Analysis
Looking at the 4-hours chart, the pair recovered above the 1.0800 and 1.0820 resistance levels. Moreover, there was a break above a key bearish trend line at 1.0810.
The pair recovered above 1.0840 and tested the 50% Fib retracement level of the downward move from the 1.0925 high to 1.0777 low. However, there are many hurdles on the upside, starting with the 1.0880 level.
The first key resistance is near the 1.0900 level (the last breakdown zone). The next key hurdle is near the 1.0920 level and the 100 simple moving average (red, 4-hours).
Therefore, EUR/USD might struggle to continue higher above 1.0880 and 1.0900 in the near term. If it fails to recover above 1.0900, there could be a fresh decline.
An initial support is near the 1.0800 level, below which there is a risk of more losses below the 1.0777 low. The next support is seen near the 1.0740 level.
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