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28.03.2023 03:12 PM
EUR/USD challenging confluence area

The EUR/USD pair rallied in the short term and now is trading at 1.0844 at the time of writing. After its amazing sell-off, a rebound was natural as the bias remains bullish. Technically, the currency pair reached a major demand zone, so the current upwards movement is normal.

Fundamentally, the Goods Trade Balance and Prelim Wholesale Inventories came in worse than expected earlier today. Still, the most important event of the day is represented by the US CB Consumer Confidence which could drop to 101.0 from 102.9 points. The US data could be decisive later and could really shake the price.

EUR/USD Rally!

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As you can see on the H1 chart, the rate turned to the upside after reaching the 1.0730 - 1.0701 support zone. Now, it challenges the median line (ml) and the 1.0837 resistance levels.

From the technical point of view, we have a strong confluence area at the intersection between these levels.

EUR/USD Forecast!

A valid breakout through the confluence area activates further growth and is seen as a bullish signal. This scenario could be activated by poor US data.

On the contrary, a false breakout above these resistance levels signals that the leg higher ended and that EUR/USD could drop. A false breakout with great separation (pin bar) or a major bearish engulfing.

Ralph Shedler,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
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