Overview:
The EUR/USD pair climbed from 1.1124 to 1.1176 and closed at the price of 1.1154. But, this week we note that the market opens below the level of 1.1124. Please, note that the resistance stands at the levels of 1.1176 and 1.1204 in the H1 time frame.
In the longer term, the strong resistance at 1.1124 (18/10/2019 high, see also the long-term declining trendline from the October 2019 peak) continues to represent a major hurdle.
Therefore, right now the first descending impulse is forming the first one; the market is being corrected from the area of 1.1470/1.1350 this week. In our opinion, the EUR/USD pair may grow up to test 1.1176 from below and then form the second descending impulse with a target at 1.1124 to test the daily pivot.
Today, if the trend is able to close below the level of 1.1176, the price will fall into the bearish market in order to go further towards the strong support at 1.1124, 1.1097 and 1.1073 to test them again.
Furthermore, the level of 1.1073 will form a double bottom which represents the major support level this week. In the the daily time frame, the pair will probably go down because a downward trend is still strong and the RSI indicator is still signaling that the trend is downward.
Conclusion
The depicted resistance level of 1.1176 acted as an important key level offering a valid sell entry. So, sell below the 1.1176 level with the targets of 1.1124, 1.1097 and 1.1073 in coming hours. Conversely, stop loss should be placed above the high reached near the second resistance (1.1240).
The material has been provided by InstaForex Company - www.instaforex.com