The EUR/USD currency pair is currently exhibiting an upward trajectory, marked by its recent breach of a significant swing high established on August 30, 2023. Despite this breakthrough, the subsequent inability to sustain a rally above this level resulted in a retracement back to the 10-day Exponential Moving Average (EMA). Observing the price action, a potential continuation of the upward momentum, originating from the 10 EMA, may unfold throughout the upcoming week, with a prospective target at 1.10652. This level is demarcated by a swing high recorded on August 10, 2023, indicating a key buy-side liquidity point. Technical indicators corroborate the optimistic outlook, as the RSI is on an upward trajectory, holding above the 70 line, and the MACD is consistently printing green bars.
However, prudence is warranted, as a failure to rally above the current supply zone could prompt a retracement, potentially revisiting the FVG generated on November 14, 2023, following a substantial bullish breakout. Expanding our perspective to higher timeframes, the monthly chart presents a bullish stance, with RSI trending upward and comfortably positioned above its midline, accompanied by MACD exhibiting robust green bars. The sole visible target above is derived from the high established in July 2023 at 1.12757. Concurrently, the weekly chart aligns with the daily readings, projecting a bullish trend with MACD producing its initial green bar and RSI exhibiting an upward slope, currently at 63.
A nuanced aspect surfaces when examining the 4-hour chart, revealing the breach of a downtrend channel that had persisted since 2008. This break, occurring in January 2023, has been pivotal throughout the year, underscoring that the previously defined channel is no longer valid. Nevertheless, it remains on the chart due to its persistent role as a support level throughout the year.
Navigating the immediate future requires a keen focus on the weekly candle. The pivotal factor lies in the necessity for a new bullish candle to break and maintain a position above the previous week's candle. Failure to achieve this could precipitate a retracement, potentially revisiting the imbalance established on November 14. Traders are advised to exercise caution, employ robust risk management strategies, and stay attuned to the evolving market dynamics.
However, prudence is warranted, as a failure to rally above the current supply zone could prompt a retracement, potentially revisiting the FVG generated on November 14, 2023, following a substantial bullish breakout. Expanding our perspective to higher timeframes, the monthly chart presents a bullish stance, with RSI trending upward and comfortably positioned above its midline, accompanied by MACD exhibiting robust green bars. The sole visible target above is derived from the high established in July 2023 at 1.12757. Concurrently, the weekly chart aligns with the daily readings, projecting a bullish trend with MACD producing its initial green bar and RSI exhibiting an upward slope, currently at 63.
A nuanced aspect surfaces when examining the 4-hour chart, revealing the breach of a downtrend channel that had persisted since 2008. This break, occurring in January 2023, has been pivotal throughout the year, underscoring that the previously defined channel is no longer valid. Nevertheless, it remains on the chart due to its persistent role as a support level throughout the year.
Navigating the immediate future requires a keen focus on the weekly candle. The pivotal factor lies in the necessity for a new bullish candle to break and maintain a position above the previous week's candle. Failure to achieve this could precipitate a retracement, potentially revisiting the imbalance established on November 14. Traders are advised to exercise caution, employ robust risk management strategies, and stay attuned to the evolving market dynamics.