EURUSD Analysis – Buyers Cease Buying as the Market Becomes Oversold
The EURUSD downtrend halts as the price retraces upward. According to the Stochastic Oscillator, the market is currently oversold. The indication of the oversold state has led to a pullback to the upside. Since the market’s overall trend is still bearish, EURUSD is likely to resume its bearish trend at the premium zone.
EURUSD Key Levels
Resistance Levels: $1.07250, $1.09810
Support Levels: $1.06010, $1.04480
On October 2, 2023, EURUSD bounced rapidly off the $1.04480 support. Invalidating the major resistance, the price continued into the premium zone. The first wave of the bullish trend ended one month later at the $1.09810 resistance. EURUSD experienced a pullback to the downside as it failed to easily break further to the upside. However, the bulls stormed the market after the price retraced to hit a significant level of $1.07250. This brought the price higher, invalidating more resistance until it peaked at $1.11390.
The peak formed as a result of the overwhelming selling pressure in the premium zone. Further price declines ensued as the Stochastic Oscillator indicated that the market was overbought. This drastic decline led to a CHoCH (Change of Character) to the downside. The overall trend of the market has since been bearish owing to this CHoCH.
Together with a falling trendline, EURUSD has been maintaining a bearish order flow. A pullback to the upside recently began after a BOS (Break Of Structure) at $1.06950. The bearish trend is, however, likely to continue after the price hits the falling trendline.
Market Expectation
Until the recent CHoCH, the order flow of EURUSD was bearish on the four-hour chart. The recent CHoCH occurred at $1.06650. The price seems to be heading upward, probably into the Breaker Block.
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