The EUR/USD pair has been exhibiting a bearish pattern within a descending channel. Despite the Federal Reserve's decision to wait with the rate cuts and a higher than expected Consumer Price Index (CPI), the pair has yet to show a strong bullish reversal.
Technical analysis: The EUR/USD pair recently rebounded off the lower boundary of the descending channel and is approaching a crucial resistance level near 1.0875, as indicated by the red line. The breakout above the upper line of the channel could signal a change in the current bearish sentiment. However, the pair faces immediate overhead resistance, and a convincing break above this level could pave the way for a move towards the 1.0900 area. If the price fails to sustain above the resistance, the support zone around 1.0840, marked by the green area, might be retested. The dotted lines suggest potential future price paths, with a break above resistance hinting at a bullish scenario, and failure to break may result in continuation within the channel.
Our position: We maintain a cautiously optimistic outlook, looking for a confirmed breakout above the channel and the 1.0875 resistance level to establish long positions. Should the FOMC Statement inject bullish sentiment into the market, we will have to reasess our stance. However, we remain vigilant, as failure to break the resistance could lead to a retest of the lower channel boundary.
Technical analysis: The EUR/USD pair recently rebounded off the lower boundary of the descending channel and is approaching a crucial resistance level near 1.0875, as indicated by the red line. The breakout above the upper line of the channel could signal a change in the current bearish sentiment. However, the pair faces immediate overhead resistance, and a convincing break above this level could pave the way for a move towards the 1.0900 area. If the price fails to sustain above the resistance, the support zone around 1.0840, marked by the green area, might be retested. The dotted lines suggest potential future price paths, with a break above resistance hinting at a bullish scenario, and failure to break may result in continuation within the channel.
Our position: We maintain a cautiously optimistic outlook, looking for a confirmed breakout above the channel and the 1.0875 resistance level to establish long positions. Should the FOMC Statement inject bullish sentiment into the market, we will have to reasess our stance. However, we remain vigilant, as failure to break the resistance could lead to a retest of the lower channel boundary.