The EUR/USD pair has seen significant growth since the 2023 lows and is now testing the key supply zone at 1.18 – 1.22. This level has historically acted as strong resistance, but the overall market structure suggests that the probability of a phase shift and the start of a sustainable bullish trend is increasing.
Mid-Term Market Structure
- Dominant Trend: Bullish since early 2023
- Active Resistance: 1.18 – 1.22
- Key Supports: 1.14 and 1.10
The recent move has been relatively strong, and the smaller consolidations indicate that the market is accumulating energy. The formation of higher lows on the weekly timeframe may be a sign of trend stabilization and potential continuation of the bullish structure.
Bullish Scenario (Primary)
If price breaks and closes above 1.18, the bullish move is likely to extend, with targets at 1.20 and 1.22. A confirmed breakout beyond this zone could signal a long-term trend reversal and open the path toward 1.25.
Corrective Scenario (Alternative)
If price fails to break resistance and closes below 1.1650, a retracement toward 1.14 becomes likely. A pullback to this support may provide an attractive buying opportunity, provided that the level holds and sellers show signs of exhaustion.
Conclusion
The market is in a decision-making phase, and a confirmed breakout above 1.18 could trigger the next bullish wave. However, the current zone remains a high-risk area for impulsive entries. The most prudent approach at this stage is:
- Wait for a confirmed breakout or a deeper pullback
- Set stop-losses below 1.1650 to ensure proper risk management
This analysis provides a mid-term outlook, while short-term traders may take advantage of potential corrective moves for intraday opportunities.
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