EUR/USD Finds Key Support

By Tomasz Wisniewski|

Published: May 24 2024, 06:55 GMT+0

EUR/USD Finds Key Support


In today’s analysis, we turn our attention to the EUR/USD pair, which is experiencing a notable rise on this Friday morning. This upward movement is not occurring randomly but is instead supported by strong technical indicators. On the chart, we observe three distinct flag patterns marked in orange. Historically, each of these flags has led to an upside breakout, resulting in significant price rallies. This consistent pattern suggests that the current setup could lead to a similar outcome.

Currently, EUR/USD is situated at the bottom of the latest flag formation, positioned precisely on a key horizontal support and a dynamic support, both highlighted in green. The convergence of these two support levels is critical. The horizontal support represents a historical price level where buying interest has previously emerged, while the dynamic support reflects the upward trend line. This combination strengthens the support zone, increasing the likelihood of a bullish reversal if these levels hold.

For traders, this setup presents a clear trading strategy. Should the price maintain above these key supports, it would confirm a buy signal with targets set at the upper boundary of the flag and potentially higher. On the other hand, a decisive break below these supports would invalidate the bullish setup and indicate a sell signal. In such a case, traders should be prepared for a potential downside move, adjusting their positions accordingly. Monitoring these critical levels will be essential for making informed trading decisions.