- EUR/USD is in a short-term uptrend since rising up from the February lows in the 1.06s.
- The pair is currently undergoing a pullback within that uptrend.
- If it finds a floor, it will likely consolidate and then resume rallying.
After reaching a peak of 1.0981 on Friday, EUR/USD has experienced a correction, currently trading in the 1.0920s as of the latest update. Despite this pullback, the pair continues to exhibit a short-term uptrend, as observed on the 4-hour chart, where successive peaks and troughs consistently form higher highs and higher lows. This overall pattern suggests a preference for bullish positions.
The EUR/USD pair has likely completed a three-wave ABC pattern or “Measured Move” at Friday’s highs, coupled with the exit from overbought conditions on the Relative Strength Index (RSI), indicating an ongoing pullback. While it remains uncertain if this correction has concluded, there is a possibility of further downside, potentially reaching support in the 1.0860s. However, given the prevailing uptrend bias, the price is anticipated to eventually find a bottom, recover, and resume its upward trajectory.
Confirmation of the uptrend resumption may come with the emergence of a short-term reversal pattern, such as a bullish candlestick reversal pattern. A break above the March 8 high of 1.0981 would serve as a robust signal for the evolution of the bull trend into a new phase of buying. It’s worth noting the challenging resistance at 1.1000, where a potential battle between bulls and bears may lead to increased volatility.
A clear and decisive breach above 1.1000, however, would pave the way for further advances toward the next significant resistance level at 1.1139, corresponding to the December 2023 high. A definitive break in this scenario would be characterized by a sustained move above the level, evidenced by a long green bar closing near its high or three consecutive green bars breaking through the resistance.
Conversely, a move below 1.0850 would signal a reversal in the short-term trend, indicating a shift in momentum favoring bears.
