Market Analysis – EURUSD Is Tapering in a Descending Triangle
EURUSD is tapering to break out of a descending triangle. This comes after a major decline in the market from the 16th to the 18th of June 2021. Price then bounced off the support at 1.18400 but failed to make it past 1.19600 and dropped back to 1.18400 and even further down. EURUSD rallied after this, but it could not achieve the immediate past height and fell again to a lower low. This pattern continued to form a tapering triangle formation.
EURUSD Key Levels
Resistance Levels: 1.18400, 1.19600, 1.21350
Support Levels: 1.17560, 1.17100, 1.16550
The market tapering movement, brought about by consecutive lower highs and lower lows, has brought it down to the 1.17560 support. This is a level that is close to the lower border of the descending triangle. The support has kept the market afloat for 5 days. EURUSD is now bouncing from it to test the upper border of the descending triangle.
The middle line of the Bollinger Band had signaled a fall in price even before the major fall from the 1.21350 key level. The line has remained above the market to exert pressure on it for its tapering movement. As of the time of writing, the market is at 1.17904 and moving up. This is reflected in the Stochastic Oscillator as a good bullish move as its signal line is now looking up from the oversold region.
The middle line of the Bollinger Band is now supporting EURUSD to go up. The market may, however, be rejected at the upper band. The Stochastic Oscillator has one of its signal lines past the middle point to show strong bullish movement.
As the market tapers down, it is expected to break out upwards or downwards. Indications are that price will drop again and the breakout will be to the downside. In such a case, the 1.17100 support will be the first point of reckoning for the market.
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