**EUR/USD Faces Strong Resistance Near Key Fibonacci Level**
*Original analysis by Sergey Shemet, Traders Union*
The euro-dollar (EUR/USD) currency pair continues to trade with a slight bullish bias, but technical indicators suggest that a strong resistance zone looms ahead. Bulls may find it increasingly difficult to push prices higher without a significant breakout above key levels, primarily due to the presence of a crucial Fibonacci retracement level and broader market uncertainties.
The article by Sergey Shemet provides a thorough technical analysis of the EUR/USD pair, focusing on price movement, resistance levels, and Fibonacci retracement zones. Expanding upon this analysis, we will delve deeper into the technical setup on various time frames, highlight key patterns, and examine potential future scenarios for EUR/USD traders.
## Current Market Overview
– **EUR/USD exchange rate**: Trading near the 1.0840 mark at the time of writing
– **Market trend**: Slight bullish recovery within a broader consolidation range
– **Key resistance**: The 1.0850–1.0870 zone, aligning with major Fibonacci retracement levels
– **Key support**: The 1.0800 psychological level and 1.0760 minor support
So far, the euro has shown gradual strength against the U.S. dollar, supported by a weaker U.S. Dollar Index (DXY) and slightly dovish rhetoric from the Federal Reserve. However, the bullish momentum appears limited, as technical indicators suggest that EUR/USD may face increasing resistance ahead. Traders should remain cautious until a decisive technical breakout occurs.
## The Role of Fibonacci Levels in Price Action
Fibonacci retracement levels are key technical analysis tools used by traders to identify potential reversal or continuation points in the market. These levels are derived by identifying recent price extremes and calculating retracement ratios, typically including 23.6%, 38.2%, 50%, 61.8%, and 78.6%.
For EUR/USD, the current upswing is approaching a key 61.8% Fibonacci retracement level drawn from the late April drop from 1.0900 to 1.0635. That retracement level coincides with the 1.0850–1.0870 resistance range, making it a critical zone to watch.
### Key Technical Observations:
– **61.8% Fibonacci retracement level**: Positioned around 1.0850, acting as a major resistance
– **Resistance cluster**: Combination of Fibonacci resistance, horizontal resistance, and psychological barrier at 1.0870
– **Support movement**: Immediate support around 1.0800, with stronger support near 1.0760
– **Average Daily Range (ADR)**: Suggests consolidation between 1.0760 and 1.0880 in the short term
## H4 Chart Analysis: Confirming Resistance Structure
The 4-hour (H4) timeframe helps provide a clearer perspective on short-term price structure. Several technical elements on this chart support the presence of a strong resistance zone.
### H4 Indicators:
– **Price action**: A consistent series of higher lows suggest bullish momentum, but price failed to clearly break above 1.0850 during previous attempts
– **RSI (Relative Strength Index)**: Fluctuating near 60, indicating neutral-to-bullish conditions, but lacking upward momentum
– **MACD (Moving Average Convergence Divergence)**: Positioned in bullish territory, but the histogram bars are shrinking, which hints at probable consolidation or loss in momentum
– **Moving averages**:
– Price is trading above the 50-period and 100-period Simple Moving Averages (SMA), suggesting bullish bias
– However, the slope is flattening, indicating that buyers are cautious above 1.0850
### Ascending Channel Structure:
– EUR/USD has remained within a broad ascending channel on the H4 chart
– The upper boundary of
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