Market Analysis- EURUSD Market Make Signs of A Trend Change
EURUSD market make signs of a trend change. This market has been on a downtrend since the beginning of last year. For several months, the market has been descending through a creek. This downtrend continued as bears easily broke across a major support level and turned it to an important resistance level on February 10th, 2022.
EURUSD Major Zones
Resistance levels: 1.0940, 1.1480
Support levels: 1.0340, 1.0200
The bears’ prolonged dominance of the market since February 10th 2022, led to lower highs and lower lows have been formed. It also led to the price smashing through all the support levels in the process. As bulls and bears continued to compete in the market, a supply zone was formed due to the imbalance in the market. This imbalance caused the formation of an order block that will either serve as a breaker during trend change and/or a supply zone one or more times in the future.
After the price hit the ‘Support Turned Resistance’ level 1.0940, EURUSD kept sinking downward. The downward movement continued until it hit a strong support level at 1.0340 on the 13th of May, 2022. Immediately after the price hit the support level, the market attained its oversold region. It caused a trend change as the price soared higher and broke the middle moving average of the Bollinger Bands. The outcome is a successful break of the market structure. The break in market structure and the oversold indicator on the Relative Strength Index indicates that the market is about to change its trend.
On the four-hour chart, the market appears to be consolidating within a triangular pattern created by an important trendline and a significant support level. It appears to be ranging between the upper and lower Bollinger Bands. The bears are anticipated to continue offloading their short positions in favour of the bulls as the market declines towards the important support level of 1.0340. Until the bulls fully seize control from the bears, the market may continue consolidating before a trend changes. The market is anticipated to respect the support level because it is a very strong and significant level that has been in place for a long time – leading to the trend change, breaking through the trend line and maybe retesting the trend line, as well as leading towards the supply zone.
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