EUR ready to breakout 1.05?

2025-03-04 @ 17:23

Price Movement

The EUR/USD daily chart shows prolonged bearish movement followed by a consolidation period. Initially, the pair experienced a significant downward trend as indicated by consecutive lower lows and lower highs. A reversal was attempted, but resistance around the 1.0500-1.0530 range halted further upward movement. Throughout the period under consideration, the price oscillated within an intermediate triangle pattern formed by converging trend lines, suggesting a market in the indecision phase. The weight of the 200-day SMA remains overhead, highlighting persistent long-term bearish sentiment. Recent candlesticks display attempts to break above resistance, met with seller pressure, indicating indecisiveness, but also potential for a shift if broken decisively.

Technical Analysis

Technical Pattern/Indicator	Analysis
Triangle Pattern	The converging trend lines define a symmetrical triangle, suggesting potential breakout direction. Continuation of the trend typically occurs in the existing direction (down), but breakouts can go either way.
Simple Moving Averages (SMA)	The 50-day SMA has crossed below the 200-day SMA earlier, confirming the ‘death cross’ and signaling potential for prolonged bearish movement. The pair is currently testing the 50-day SMA from below.
Fibonacci Retracement Levels	Retracement levels are marked at 0.382 (1.0574), 0.50 (1.06952), etc. The price tested but did not decisively breach the 0.236 level, suggesting weakening of bearish momentum.

Outlook

The current outlook for EUR/USD remains cautiously bearish with chances of potential reversal if key resistances are broken. The symmetrical triangle indicates consolidation, with an impending breakout being likely. Traders should watch for a decisive closing beyond the triangle pattern for trend direction. A break above the 1.0500-1.0530 could suggest bullish reversal and target higher Fibonacci levels. Alternatively, failure to sustain above the 50-day SMA might indicate a resumption of downward momentum, potentially testing next support levels.