EURUSD: Reversal or break-out? How to trade the next key levels.

OANDA:EURUSD   Euro / U.S. Dollar
EURUSD has just reached the Lower Low level on the long term 1M Channel Down ( RSI = 38.501, MACD = -0.009, Highs/Lows = 0.0204) that it has been trading in since August 2018. This is technically as low as it can get withough breaking this long term pattern. We should mention that it did so within a standard 1D Channel Down (illustrated in green), which creates the following conditions.

If the 1D Channel Down breaks to the upside (right now the limit is at 1.10210), then the price by crossing the 1D MA50 (blue line) it can make contact with the 1D MA200 (orange line) and create the new Lower High (see the Lower High zone) within the 1M Channel Down.

If however the price breaks below the Lower Low zone (red shape) of the 1M Channel Down, then the 1D Channel Down can take EURUSD (smoothly or more aggressively which is our expectation) towards the ultimate Target Zone of the 2015/ 2017 Lows as seen on the chart. That is also the long term High Demand Zone and since it has been holding for nearly 2 decades, it should accumulate buyers.

We believe this is the overall picture on EURUSD , so it may be a useful guide on how to trade the coming months. Always formulate your trading plan according to your risk tolerance and account conditions.

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