EURUSD Bounces off a Crucial Resistance

The last two days have been great for the EURUSD. The price established new August highs and managed to climb to the highest levels since the beginning of July. One could think that this is the start of a new bullish trend, but the technical analysis has quite a different opinion on the matter.

Over the past few days, the EURUSD met a crucial resistance and the number of bearish signals has been definitely very significant.

First of all, the price met 1.035, (blue), lows from May and June, which seem to be a very strong resistance at the moment. At the same time, the EURUSD bounced off the long-term down trendline, which have connected the lower tops since the beginning of the year. We can say that this is the most important down trendline of 2022 at the moment. For dessert, we have a correction equality (yellow), so the one from May being almost the same as the current one. This is certainly a sweet addition to the whole package.

If this is not convincing enough, one could wait for the breakout of the red support first. This is the mid-term up trendline, which supports the most recent bullish correction. A breakout of that line would mean the end of this correction and would be a final confirmation for a sell signal. As for a target, it seems that parity is a reasonable one, and the current chances that the price will get there are quite high.