EUR/USD Poised for Pullback Before a Potential Bullish Continuation
The EUR/USD pair is currently consolidating within a rising wedge formation, a pattern that's often indicative of a potential pullback. Having reached the upper boundary around 1.1320, the pair faces resistance, which has historically triggered minor corrections. The crucial support level to watch is around 1.1145. A breach below this could initiate a deeper correction toward the 1.1070-1.1170 demand zone. This area is particularly significant, aligning with the golden pocket Fibonacci retracement level (61.8%-65%) and historical price action levels. The overlap of these technical factors suggests that a pullback to this zone could provide high-probability long entry opportunities.
Technical Indicators:
- The RSI hovers in neutral territory, suggesting room for price movement without triggering overbought conditions.
- The 200 EMA sits below the price, confirming the prevailing bullish market structure.
While a retracement is anticipated, the overall bullish trend structure remains intact, marked by higher highs and lows. As such, any pullbacks should be viewed as potential accumulation zones within the broader uptrend. A bounce from the aforementioned demand zone could see the pair targeting the current range high near 1.1350 and possibly extending toward the 1.1500 resistance. However, a break below the identified demand zone could invalidate this bullish setup, warranting a reassessment of the market dynamics. As always, exercise prudent risk management and confirm entry triggers on lower timeframes before executing trades.
Patience remains key. Monitor the upcoming price action closely, as the consolidation phase could offer a favorable risk-to-reward ratio for those prepared to capitalize on the strategic pullback.
