The euro/dollar pair has formed a descending wedge pattern on H4 charts which has been moving with a bearish bias since June 14 and has continued to fall until August 20. The EUR/USD pair has reached a key support of - 1/8 of a murray that represents an imminent rebound for the next few days.
This descending wedge pattern is a bullish signal pattern or a trend change. The formation of this technical pattern begins with a wide figure that narrows as the price of the pair decreases, forming a cone or wedge with a downward inclination due to the convergence of the lines that join the peaks and the lows that are formed by price action.
This technical pattern has an upward potential for the euro. For this, we must wait for a breakout and a pullback above 1.1718. There is the 0/8 murray line that represents a strong resistance. Above this level the euro will remain released from the downward pressure and could rise to the key level of 1.1900.
A breakout of 1.1658 (-1/8) would change our bullish outlook and could fall to a critical level of 1.1596 (-2/8). We should avoid buying at a close and consolidation below 1.1660 and wait for the next market move.
The eagle indicator is showing a bullish signal, given that since August 9 it has been showing a positive divergence signal. Therefore, a breakout and consolidation above 1.1690 or a technical rebound in the support of 1.1665 will give us a good opportunity to buy.
Also, a break above the 0/8 murray resistance located at 1.1719 ,will be a trend reversal signal targeting the 200 EMA located at 1.1795 and could reach the key resistance level of 1.1901 in the short term.
Support and Resistance Levels for August 23 - 24, 2021
Resistance (3) 1.1754
Resistance (2) 1.1730
Resistance (1) 1.1713
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Support (1) 1.1673
Support (2) 1.1647
Support (3) 1.1618
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Trading tip for EUR/USD for August 23 - 24, 2021
Buy if the price rebounds at 1.1665 (-1/8), with take profit at 1.1795 (EMA 200), stop loss below 1.1630.
Buy above 1.1690 (SMA 21), with take profit at 1.1795 (EMA 200), stop loss below 1.1655.
