EUR/USD targets key breakout: Fresh upside potential growing

Key highlights

• EUR/USD corrected gains and tested the 1.1265 support zone.
• A connecting bearish trend line is forming with resistance at 1.1340 on the 4-hour chart.

EUR/USD technical analysis

Looking at the 4-hour chart, the pair settled below the 100 simple moving average (red, 4-hour) but stayed above the 200 simple moving average (green, 4-hour). A low was formed at 1.1265 and the pair is now attempting a fresh increase. There was a move above the 1.1300 level.

The pair is now facing resistance near the 1.1340 level and the 100 simple moving average (red, 4-hour). There is also a connecting bearish trend line forming with resistance at 1.1340 on the same chart.

An upside break above the trend line resistance could start a steady increase. The next major resistance is near the 1.1420 zone and the 50% Fib retracement level of the downward move from the 1.1572 swing high to the 1.1265 low.

A close above the 1.1420 level could set the tone for another increase. In the stated case, the pair could even clear the 1.1500 resistance.

On the downside, immediate support sits near the 1.1280 level. The next key support sits near the 1.1265 level. Any more losses could send the pair toward the 1.1150 level.