EURUSD faces resistance around 1.2250/60 zone

Written by Finacademy.io

May 24, 2021

Technical Analysis:

EURUSD had raised through 1.2345 highs over the last week before reversing lower towards 1.2170 mark on Friday. Bears might remain poised to take control back from here and drag prices lower towards 1.1986 levels soon.

EURUSD structure still remains constructive to resume trend lower towards 1.1300 and beyond, since the rally between 1.1704 and now seems corrective a-b-c as shown on the daily chart. Wave a had unfolded as an impulse, b had terminated around 1.1986 while wave c might be unfolding as an ending diagonal.

The proposed ending diagonal either terminated at 1.2245 levels over the last week with the last wave being a truncation; or it could terminate over this week with yet another high above 1.2245 levels respectively.

A break below 1.1986 will confirm that the diagonal structure is complete and that EURUSD is turning lower again. If the above structure is correct, EURUSD might be dropping towards 1.1300 and further, over the next several weeks.

Alternately, if prices break above 1.2350 levels, the above bearish structure would be considered void and bulls could push higher towards 1.2500 levels, going forward. Probabilities remain high for a bearish resumption from here though.

Watch out for a potential test of 1.2245 levels as the week progresses, before EURUSD bears are back with vengeance. Also if 1.1986 breaks from here, it would confirm that a meaningful top is in place already.

Prepared by

Finacademy Technical Team

Related Articles

EURUSD progressing in Wave (3) lower towards 1.1300 levels

EURUSD progressing in Wave (3) lower towards 1.1300 levels

EURUSD has finally reversed lower from 1.2218 highs last week, after having drifted sideways for a while. The drop was much anticipated as bears have managed to take out over 300 pips since last Wednesday. They remain poised to target below 1.1700 in the near term.

US Dollar Index preparing to push higher towards 95.00/96.00

US Dollar Index preparing to push higher towards 95.00/96.00

US Dollar Index has raised through 92.00 levels as of now and bulls are looking poised to extend further through 95.00, 96.00 levels in the next few weeks. It is quite possible that they continue higher from here itself or after a pullback, but prices stay above 89.60 levels.

USDJPY prepares to push through 111.20 levels

USDJPY prepares to push through 111.20 levels

USDJPY breaks higher towards 110.80 levels yesterday as the technical direction was clear and discussed here. At times market awaits a trigger to push through its determined trend; it was the Fed interest rate yesterday that provided the same.

en_US