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Strong Resistance Could Prevent Further Gains for the EUR/USD Pair

December 6, 2021

  • EUR/USD tested support near 1.1300.
  • Bullish trend line has formed support near 1.1270.

The Euro, US Dollar pair started to correct higher from near 1.1186. EUR/USD broke above the 1.1300 level, but now faces strong resistance.

 

EUR/USD 4-Hour Chart (Trend: BEARISH)

On the 4-hour chart, the EUR/USD pair tested the 100-MA (red) multiple times and has continued to trade well below the 200-MA (blue). The quote briefly broke above the 23.6% Fibonacci retracement level of the downward move from the swing high of 1.1692 to the swing low of 1.1186. It later settled back below 1.1300.

For the pair to turn bullish, the quote will first need to test the 1.1350 level. The next major resistance is near 1.1400 and the 50% Fibonacci retracement level (of the 1.1692 high to the 1.1186 low). A clear break above the 1.1350 and 1.1400 levels could trigger a fresh climb.

In contrast, if the pair continues bearish, the quote will first test the 1.1250 and 1.1240 support levels. A break below these could see the quote drop down towards the 1.1150 level.

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