In our previous EUR/USD analysis, we explored why $1.06736 required to hold if EUR/USD prices were to increase. On the daily time scale, the price recovered to $1.06736 and formed a bullish Pin bar. The EUR/USD pair surged and surpassed the $1.07825 supply zone, which proved to be too tough to break. On Thursday's daily candle, we could see a massive wick, indicating that the price was unable to close the day above the prior day's candle highs.
The price then dropped, forming a large bearish engulfing candle that completed the day below the previous weekly false breakout downwards. The price continued to fall, and on Friday, it easily broke through the $1.05825 support level. The price came to a halt at a support level of $1.05087, which included a support confluence with an uptrend support line and a horizontal support line.
We could see a price near to $1.05825 this week, which would be a breakthrough confirmation. It is the initial resistance and its confluence with the uptrend support line, forming the resistance and horizontal resistance line.The price might reach $1.05600, which is greater than the level reached on past reversal attempts following a sell-off, so we can expect a similar reaction and aim.
We are looking for a SELL entry around $1.05825, as this is a good resistance level. However, it is advisable to wait for a price action sign that indicates a price decline.
