Price action on the monthly chart of the EUR/USD offers an interesting technical landscape to work with. You will acknowledge that support from $1.0519 has served as a technical floor since the beginning of 2023 and remains the case as we near the end of Q1 2024. Overhead, ascending support-turned-resistance (drawn from the low of $1.0340 – formed by way of a bullish engulfing candle in 2017) has also established a technical ceiling.
While the currency is still undeniably entrenched in a long-term downtrend (since 2008), the tide may be beginning to change. Take note that January’s (2024) reaction from the noted ascending support-turned-resistance failed to generate much follow-through downside. In fact, we printed an indecision candle in February, and March is up by +1.3%. This highlights strength on the side of buyers for the time being and continued upside in this market could eventually see the unit overthrow the ascending support-turned-resistance, a move that may pencil in a higher high. However, while a higher high would effectively confirm an early uptrend for the currency pair, traders will likely seek a break of neighbouring long-term trendline resistance (extended from the high of $1.6037) before having conviction in the beginnings of an uptrend.
While the currency is still undeniably entrenched in a long-term downtrend (since 2008), the tide may be beginning to change. Take note that January’s (2024) reaction from the noted ascending support-turned-resistance failed to generate much follow-through downside. In fact, we printed an indecision candle in February, and March is up by +1.3%. This highlights strength on the side of buyers for the time being and continued upside in this market could eventually see the unit overthrow the ascending support-turned-resistance, a move that may pencil in a higher high. However, while a higher high would effectively confirm an early uptrend for the currency pair, traders will likely seek a break of neighbouring long-term trendline resistance (extended from the high of $1.6037) before having conviction in the beginnings of an uptrend.