EURUSD Tests Key Support — Is This the Base for a Bullish Revers

Jan 7

EURUSD on the H1 timeframe has been in a corrective bearish phase following a prolonged distribution period at the highs, with price trending lower beneath declining moving averages. Momentum weakened sharply during the selloff, culminating in a strong downside extension that swept liquidity below prior lows before price began to stabilize.

Current price action shows EURUSD reacting directly from a clearly defined support zone around the 1.1670 region. The sharp rejection from this area suggests the presence of responsive buyers stepping in after the liquidity sweep, creating conditions for a potential short-term base. While the broader intraday structure remains corrective, this reaction indicates that selling pressure is beginning to lose momentum.

If price can continue to hold above the support zone and build higher lows, a corrective rebound toward the 1.1710 region becomes the first area of interest. This level aligns with prior intraday structure and represents the initial objective where sellers may attempt to re-engage. Acceptance above this zone would improve the probability of further upside rotation.

A sustained move beyond 1.1750 would signal a deeper mean reversion within the range, opening the path toward the 1.1780 region where prior distribution occurred. Such a move would reflect a broader corrective recovery rather than an immediate trend reversal, but it would still offer constructive upside potential in the near term.

However, failure to hold the 1.1670 support would invalidate the recovery scenario and expose the pair to further downside continuation. In that case, price could extend lower as the market searches for deeper liquidity before any meaningful structural shift develops.

Jan 8

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