The EURUSD pair reversed back towards the 1.1400 support zone on Friday, following the release of much-weaker than anticipated retail sales data from the United States economy.
Last Friday the EURUSD pair peaked just above the 1.1480 resistance level on the heels of a break-neck speed breakout above the 1.1390 resistance level.
So this week, the big area to watch is 1.1390. This is not only the former key breakout zone, but the top of the wedge pattern that the EURUSD pair breakout from last week.
Additionally, the 1.1390 level is dual support from a multi-year trendline, not to mention the former January price high. So, this really is the key technical zone to watch.
It should be noted that the EURUSD pair is still in a bear trend as it trades well-below its key 200-day moving average, which is currently located around the 1.1740 level.
Overall, bulls could take another shot at the 1.1500 level if the 1.1390 area holds. However, if this support zone does break we could probably see quick selling towards the 1.1360/50 price area.
In terms of sentiment, we are seeing neutral sentiment, despite the EURUSD pair posting a near 80-point price reversal last Friday from 1.1482.
The ActivTrader market sentiment tool current shows that 51 percent of traders are bullish towards the EURUSD. Typically, neutral sentiment suggests range trading.
EURUSD Short-Term Technical Analysis
The four-hour time frame shows that the EURUSD pair is on the cusp of testing a key former breakout from the mentioned wedge pattern, around the 1.1390 level.
The overall size of the pattern indicates a move of around of 150 points, which would actually take the EURUSD pair close to the 1.1540 level. This could mean the EURUSD has not yet peaked.
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EURUSD Medium-Term Technical Analysis
Looking at the daily time frame and the EURUSD pair has staged a number of important technical breaks. The first break is from a wedge pattern, then a key trendline break on the daily time frame.
The EURUSD pair has fallen back inside Ichimoku cloud, making the 1.1440 level particularly important for further upside towards this week. Watch out for a battle between the 1.1440 and 1.1390 area before a move to 1.1540 or 1.1300 happens.
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