Last week, the EUR/USD pair climbed from 1.0471 to 1.0581 and closed at the price of 1.0505. But, this week we note that the market opens below the level of 1.0581.
Please, note that the resistance stands at the levels of 1.0581 and 1.0649 in the hourly time frame. In the longer term, the strong resistance at 1.0649 (last week high, see also the long-term declining trendline from the April 25, 2022 peak) continues to represent a major hurdle.
Therefore, right now the first descending impulse is forming the first one; the market is being corrected from the area of 1.0471/1.0400 in coming hours.
In our opinion, the EUR/USD pair may grow up to test 1.0581 from below and then form the second descending impulse with a target at 1.0471 to test the bottom.
Today, if the trend is able to close below the level of 1.0471, the price will fall into the bearish market in order to go further towards the strong support at 1.0400 and 1.0342 to test them again.
Furthermore, the level of 1.0342 will form a new double bottom which represents the major support level this week. In the the daily time frame, the pair will probably go down because a downward trend is still strong and the RSI indicator is still signaling that the trend is downward.
Conclusion :
The depicted resistance level of 1.0581 acted as an important key level offering a valid sell entry. So, sell below the 1.0471 level with the targets of 1.0400 and 1.0342. Conversely, stop loss should be placed above the high reached near the second resistance (1.0649).
