EUR/USD Is Facing Channel Support

EURUSD stays in a bullish price channel on its daily chart and remains in the uptrend from 1.0569. As long as the price is in the channel, the fall from 1.2092 could be treated as consolidation of the uptrend and the bullish movement could be expected to continue after the consolidation.

On the upside

The EURUSD pair stays below a descending trend line on the 4-hour chart. A clear break above the trend line resistance could signal completion of the short term downtrend from 1.2092, then further rise to test 1.2092 resistance could be seen. If this level give way, the following bullish move could take price to next resistance level at the 50% retracement taken from the May 2014 high of 1.3993 to the January 3 low of 1.0340 at around 1.2165, followed by 1.2700.

On the downside

The pair is facing the bottom support trend line at 1.1880 of the price channel on the daily chart. A clear break below the channel support would suggest that consolidation for the uptrend from 1.0340 is underway, then the following pullback could bring price to next support level at 1.1662.

The key support is located at the resistance-turned-support trend line at the weekly chart, now at 1.1420. A clear break below the trend line support would confirm that the uptrend from 1.0340 had completed at 1.2092 already, then the following bearish movement could bring price back towards 1.0340.

For long term analysis

EURUSD formed a double bottom pattern on the weekly chart, with neckline from 1.1713 to 1.1616. As long as price is above the neckline support, further rise towards its measured move target at 1.2700 is still possible.

Technical levels

Support levels: 1.1880 (the bottom support trend line of the price channel on the daily chart), 1.1662 (the August 17 low), 1.1420 (the resistance-turned-support trend line on the weekly chart).

Resistance levels: 1.2165 (the 50% retracement), 1.2700 (the measured move target).