EUR/USD retreats to major support, breakdown risks emerge

Key highlights

• EUR/USD started a downside correction from the 1.1800 zone.
• A key bullish trend line is forming with support at 1.1700 on the 4-hour chart.

EUR/USD technical analysis

Looking at the 4-hour chart, the pair settled above the 200 simple moving average (green, 4-hour) and the 100 simple moving average (red, 4-hour). A high was formed at 1.1804 before there was a pullback. The pair dipped and tested the 50% Fib retracement level of the upward move from the 1.1615 swing low to the 1.1804 high.

On the downside, there is key support at 1.1700. There is also a bullish trend line forming with support at 1.1700. A downside break below the trend line might spark bearish moves.

The first major support is 1.1655 and the 76.4% Fib retracement level of the upward move from the 1.1615 swing low to the 1.1804 high. The next support could be 1.1615 and the 200 simple moving average (green, 4-hour), below which the bears might aim for a move toward 1.1550.

Immediate resistance sits near 1.1750. The first key hurdle is seen near 1.1760. A close above 1.1760 could open the doors for a move toward 1.1800. Any more gains could set the pace for a steady increase toward 1.1850.