EMA Reaction Sparks a Bounce — Correction or the Start of TrendEURUSD is still operating inside a broader bearish structure, with the dominant trend defined by a clear sequence of lower highs and lower lows. However, the most recent price action shows a counter-trend corrective bounce emerging from oversold conditions rather than a confirmed trend reversal. The strong bullish candle from the recent low signals short-term short covering and reaction buying, but this move should be treated as corrective within a downtrend until proven otherwise.
EMA Reaction & Technical Confluence
Price has just reacted precisely from the EMA zone, which has acted as dynamic resistance throughout the downtrend. The current push above the EMA reflects momentum relief rather than structural change.
Importantly:
- The EMA is still sloping downward
- Price remains below major prior supply
- No higher high has been formed yet
This setup often leads to a pullback–continuation sequence, where price retests higher resistance levels before sellers reassert control unless strong acceptance occurs above key levels.
Key Levels
Resistance:
1.1698 – 1.1713 (prior supply / corrective target)
1.1750 – 1.1760 (major structure resistance / trend invalidation)
Support:
1.1650 – 1.1660 (EMA reaction zone)
1.1620 (recent swing low / bearish continuation trigger)
EMA / Dynamic Level:
EMA acting as short-term balance, still bearish in slope
Scenarios
➡️ Primary Scenario (Corrective Bounce):
Price continues the corrective move toward the 1.1698–1.1713 resistance zone. This area is expected to attract selling interest, where the market may form a lower high before resuming the broader downtrend.
⚠️ Risk Scenario (Trend Shift Attempt):
A strong breakout and acceptance above 1.1750 would weaken the bearish structure and signal a potential transition into a broader range or trend shift. Until that level is reclaimed, bullish moves remain corrective.
