EUR/USD rallied on Tuesday, rebounding from the low of 1.1287 and reaching the resistance of the top of the downtrend channel.
Currently, it is trading below the 21 SMA below the 200 EMA and inside the downtrend channel. The trend remains negative. It is likely that in the next few hours the downward movement will continue towards the support 1/8 Murray at 1.1291.
Some optimism returned to financial markets after Ukraine's President Volodymyr Zelenskiy said he believes there will be no war and no wider escalation.
A daily close above 1.1352 and the break of the downtrend channel could be positive for the euro and it could reach the level of 1.1413 (3/8 Murray) and 4/8 Murray at 1.1474.
In the long term, EUR/USD is expected to maintain the negative outlook as long as it trades below the important 200 EMA on daily charts, today located at 1.1632.
As long as the euro continues to trade in the range zone between 1.1291 - 1.1360, there will be no clear signs for a sustained rally.
If the euro breaks out of this range zone in the next few days, it is likely that a new trend will originate or that the main dominant trend will resume.
Our trading plan for the next few hours is to sell below 1.1340 (200 EMA) with targets at 1.1291 (1/8) and a break of the wedge pattern could drop to the bottom of the downtrend channel at 1.1230 (0/8).
Support and Resistance Levels for February 23 - 24, 2022
Resistance (3) 1.1413
Resistance (2) 1.1384
Resistance (1) 1.1363
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Support (1) 1.1291
Support (2) 1.1268
Support (3) 1.1215
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Scenario
Timeframe H4
Recommendation: sell below
Entry Point 1.1340
Take Profit 1.1291; 1.1230
Stop Loss 1.1387
Murray Levels 1.1474 (4/8), 1.1413(3/8), 1.1352 (2/8), 1.1291(1/8)
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