EURUSD Analysis – Buyers Are Contesting to Drive the Market Beyond 1.13840
EURUSD buyers are contesting to drive the market out of the ranging phase in which it has been bottled up since mid-November last year. The ranging phase shows a clash between buyers and sellers as buyers try to bring the long-drawn bearish activity of a market to a halt. Price, therefore, dropped below 1.13840 on the 15th of November and has been prevented from dropping below the next significant level at 1.12020.
EURUSD Significant Levels
Resistance Levels: 1.13840, 1.15180
Support Levels: 1.12020, 1.09900
The market's drop began as soon as the price hit the monthly resistance level at 1.22620. The price pattern, therefore, conforms to a double top formation with the 1.17130 price line acting as the formation neckline. Sellers were then found contesting to drive liquidity below the neckline. After two months of consolidation, they successfully pushed the market to a lower price level of 1.15180 and then beyond 1.13840.
However, buyers gained strength and began contesting for supremacy of EURUSD just at the 1.12020 significant level. This, therefore, bottles up the market in consolidation for the last two months of 2021. Buyers, however, remain determined to complete the market retraction as shown by the MA period 14 (Moving Average). The MA line is practically cupping the market up from below. This is accompanied by a gradual and consistently rising RSI (Relative Strength Index) line.
On the 4-hour chart, the price is currently declining after crashing against the 1.13840 key resistance level. This is reflected on the RSI chart as a retracement from the overbought zone line. The MA period 14 remains below the current price level and is set to act as market support to aid the breakout of the market past the 1.13840 key level. When this happens, 1.15180 is the next target.
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