With the US dollar resurging, the euro is likely to push lower in the coming days. This is evident from the fact that price did not break past the 1.1952 level last week.
The consolidation near this level indicates the potential resistance area here.
For the moment, prices have closed slightly higher compared to the 9th March lows of 1.1835. Therefore, the move to the downside will be valid if the EURUSD closes below this level. It will then open the way for further declines.
The next main support level is near the 1.1715 area.
However, for the moment, the price level near 1.1857 will be critical considering that we also have a minor resistance level that has turned to support. An alternative scenario could be that the EURUSD will remain range-bound within 1.1952 and 1.1835 in the near term.
This consolidation could see the bias equally balanced with the likelihood of prices breaking out in either direction. Above 1.1952, we have the 1.2050 level of resistance next. However, giving weight to the downside bias is the double top pattern that is evident on the four-hour chart time frame.
A close below 1.1893 puts the downside target below the minor resistance area of 1.1857, which will confirm the larger move to 1.1715.
On the economic front for the week ahead, the calendar is dominated by speeches from various Fed members, including Fed Chair Jerome Powell.
Powell is set to testify to US Congress over the week. We also have ECB President Lagarde speaking during the week as well.
As a result, the EURUSD is likely to find some catalyst in order to seek direction. The US dollar index is currently in a short-term correction to the upside, with price forming higher lows in recent time periods.
This correction could see the greenback edging higher in the medium-term horizon.
Join our responsible trading community - Open your Orbex account now!
