EURUSD Flips Bullish After Invalidating the Descending Channel

EURUSD Analysis – Market Flips Bullish After Invalidating the Descending Channel

EURUSD flips bullish after invalidating the descending channel. Following the breach of the descending channel, EURUSD buyers have been showing interest in keeping the market bullish. Candlesticks could be seen posting greens with their highs respecting a rising trendline.

EURUSD Significant Zones

Demand Zones: 0.98100, 0.9600
Supply Zones: 1.0100, 1.0350

The descending channel had been greatly respected by market participants, such that buying and selling barely caused a breach in either boundary of the descending channel. Similarly, price conformed within the Bollinger Bands as it failed to go haywire. For over eight months and still counting, the EURUSD has never entered the overbought region, indicating the intensity of the selling pressure at both horizontal and diagonal resistances. Looking back to May 13, 2022, the previous support at 1.0350 got a nice hold on price until the EURUSD sellers aggressively struck and broke the previous support on the 5th of July, 2022.

 Since the previous support at 1.0350 got broken, the Relative Strength Index barely broke the 50.0 level upward until October 2022. With great impression, the EURUSD headed upward to retest the 1.0350 price level, thereby rendering it a significant level in the market. Price continued steadfastly downward only to create a failure swing in October. This marked the turnaround for EURUSD, as the bears could not bare the challenge but ended up getting squeezed out by the bulls. Following the failure swing, the market’s direction bias was confirmed when the market’s structure shifted and the price waned down to create a short-term low at the daily bullish order block.

Market Expectation

After the price hit the 78.60% Fibonacci retracement level in the discount zone, the price headed upward to clear out buy-side liquidity. The order flow of EURUSD is expected to remain bullish until the 1.0350 resistance is reached.

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