In the latest trading session, the EUR/USD has experienced a sharp rebound from the lower bounds of a descending channel, hinting at potential shifts in market sentiment. This movement comes amid a backdrop of a higher-than-expected U.S. unemployment rate, challenging the strength of the USD.
Technical analysis: The EUR/USD pair is currently challenging a critical resistance level near 1.0875, represented by the upper red line. The price's ascent to this point may be indicative of changing dynamics as it approaches the apex of the narrowing channel. The zone near 1.0800 acts as a key zone. A sustained break above the channel could invite a bullish scenario, with potential targets below the 1.0900 mark. Conversely, inability to breach this resistance could see the currency pair retreat back to test lower support levels.
Our position: Given the unexpected rise in U.S. unemployment figures, our perspective leans towards cautious optimism for the EUR/USD. We are on alert for a decisive close above the 1.0875 resistance, which could validate a bullish reversal and serve as an entry point for long positions. In the event of a reversal and a break below current support, we would reassess for potential short opportunities, aligning with the prevailing downtrend within the channel.
Technical analysis: The EUR/USD pair is currently challenging a critical resistance level near 1.0875, represented by the upper red line. The price's ascent to this point may be indicative of changing dynamics as it approaches the apex of the narrowing channel. The zone near 1.0800 acts as a key zone. A sustained break above the channel could invite a bullish scenario, with potential targets below the 1.0900 mark. Conversely, inability to breach this resistance could see the currency pair retreat back to test lower support levels.
Our position: Given the unexpected rise in U.S. unemployment figures, our perspective leans towards cautious optimism for the EUR/USD. We are on alert for a decisive close above the 1.0875 resistance, which could validate a bullish reversal and serve as an entry point for long positions. In the event of a reversal and a break below current support, we would reassess for potential short opportunities, aligning with the prevailing downtrend within the channel.