EUR/USD Declines After Rejection at Key Resistance Levels: Technical Analysis
Date: October 10, 2023
The EUR/USD currency pair experienced a decline today following an unsuccessful attempt to break above significant resistance levels. The currency pair’s movement is attracting attention as traders watch for potential support levels indicated by key moving averages.
Resistance Failure
Earlier today, the EUR/USD tried to push higher, aiming to break through the critical swing area between 1.1265 and 1.1276. This range, which previously served as a support floor, has recently turned into resistance, and today’s attempt to breach it resulted in a visible downswing. The quick rejection at these levels has signaled a bearish shift, prompting traders to reassess their positions.
Testing Key Support Levels
As the EUR/USD pair retraced, it is currently examining the vital support zone defined by the 200-hour and 100-hour moving averages, located at 1.1208 and 1.1197, respectively. These moving averages are crucial short-term indicators for traders, where maintaining a position above these averages suggests a potential for renewed upside movement. Conversely, a decisive drop below these key levels could reinforce a bearish sentiment among market participants.
Potential Downside Targets
In the event of a sustained breach below the moving average cluster, traders will likely focus on several downside targets. The immediate level of interest is Friday’s low at 1.1130, followed closely by last week’s low at 1.10636. Additionally, attention will turn to the 38.2% Fibonacci retracement level of the move from the January 2025 low to the recent April high, which sits at 1.10395. ### Summary of Key Levels
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Resistance Levels:
- 1.1265 to 1.1276: Critical swing area; once support, now resistance.
- 1.1345: Trendline resistance.
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Support Levels:
- 1.1208: 200-hour moving average.
- 1.1197: 100-hour moving average.
- 1.1130: Low from last Friday.
- 1.10636: Low from last week.
- 1.10395: 38.2% retracement of the move up from the January low.
As market participants digest this technical analysis, traders are urged to keep a close watch on the EUR/USD pair’s movements to determine the next steps. The interplay between support and resistance will undoubtedly shape trading strategies in the coming days.
For more insights, stay tuned to Smart Money Mindset.
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