Market Analysis- EURUSD Market Continues to Range in a Descending Channel
EURUSD market continues to range in a descending channel. EURUSD market has been in a downtrend since January 4, 2021 due to the accumulation of sell orders around the April 2018 supply zone. For several months, the market has been descending through a creek. On May 24, 2021, the trend continued downward to create an imbalance in the market.
EURUSD Major Zones
Resistance levels: 1.1480, 1.2350
Support levels: 0.9560, 0.9330
EURUSD prices have been smashing through all support levels as a result of the bears’ prolonged dominance of the market since February 7, 2022. The market entered a descending channel after breaking through the previous support level at 1.1480. As EURUSD continues to respect the descending channel, an order block was formed on March 30, 2022 due to a market imbalance, resulting in fair value gaps (FVG) that must be filled later.
After reaching the previous resistance level of 1.1480, the EURUSD continues to fall in relation to the descending channel formed below the resistance level. Prices can be seen forming lower lows as they continue to respect the descending channel and bounce off the Bollinger Bands (BB). The lower lows are due to the prices reaching the oversold region below 30, as indicated by the Relative Strength Index (RSI).
EURUSD Market Expectation
Following the break of structures (BOS) on the four-hour timeframe, the candlesticks continue to bounce off the Bollinger Bands (BB) as prices fall impulsively downward. The Relative Strength Index (RSI) indicates that the market is just emerging from an oversold region. The market is expected to continue respecting the descending channel until a true breakout occurs on either side of the descending channel.
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