EUR/USD has been consolidating inside an ascending triangle for quite a while and is currently testing resistance.
Is the pair about to fall back to support again?
Or will it attempt a break higher and longer-term climb?
EUR/USD 4-hour Forex Chart by TradingView
Strengthening expectations of a December Fed rate cut, combined with neutral-to-hawkish ECB commentary over the past few weeks, have lifted EUR/USD all the way up from its triangle bottom to top.
Now the resistance around the 1.1650 minor psychological mark seems to be holding as a ceiling, potentially keeping the pair in consolidation.
How low can EUR/USD go from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price has dipped below the pivot point level (1.1640) to suggest a pickup in selling pressure that could sustain the drop to the next bearish targets at S1 (1.1590) then S2 (1.1540) closer to the ascending triangle support.
However, the 100 SMA just crossed above the 200 SMA to suggest that the path of least resistance is to the upside or that there’s still a chance euro bulls could take over.
If that’s the case, look out for another test of the triangle top or the nearby upside barrier at R1 (1.1690), as a break higher could take EUR/USD past the key 1.1700 handle then R2 (1.1730).
Just be sure to adjust for additional volatility around the highly-anticipated FOMC decision!
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
