EUR/USD just broke above a multi-month trend line resistance!
Will this lead to a trend reversal for the pair?
Let’s take a closer look at the 4-hour time frame:
EUR/USD: 4-hour
EUR/USD 4-hour Forex Chart Faster with TradingView
The dollar has been under pressure from several directions lately. The Fed held rates at 3.50% to 3.75% at its July 28 to 29 meeting, but three officials voted for a hike, while falling U.S. Treasury yields and broad Greenback weakness tied to suspected MOF intervention sent USD/JPY tumbling nearly 3% in a single session.
The euro, for its part, has been drawing quiet support from the ECB’s June rate hike to 2.25% and Lagarde’s data-dependent signals pointing toward a potential September follow-through.
With traders also turning cautious ahead of Friday’s July jobs report, the dollar may struggle to regain its footing.
EUR/USD has broken above the descending trend line that had capped rallies since early May, with buyers also pushing through the key 1.1500 psychological level. The pair was trading near 1.1530 at the time of writing.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The setup also looks more constructive with the two moving averages converging and a potential golden cross forming. If that confirms, it could attract more momentum buyers, with the R1 pivot at 1.1599 marking the next major resistance area.
Bulls looking to ride the reversal will want a clean hold above 1.1500 on the 4-hour and a decisive push through R1 at 1.1599, which could then open the door toward the R2 Pivot Point up at 1.1670.
Bears watching for a fakeout, on the other hand, will have their eyes on a rejection back below the broken trendline and the 1.1500 handle, which could drag price back toward the Pivot Point near 1.1477 and eventually the S1 zone around 1.1408.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
EUR/USD just broke above a multi-month descending trendline and the 1.1500 level, and the bull thesis in this article centers on exactly what this lesson covers. Premium members can read our lesson:
📖 The Break-and-Retest: A Higher-Probability Breakout Entry
Reading this helps you understand what a valid retest looks like after a key level breaks, how to tell a genuine continuation from a trap, and where to find a higher-probability entry once a breakout is confirmed.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
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