Title: EUR/USD Shows Strong Bullish Momentum Above Ascending Trendline
Original Author: Justin Bennett
Source: Forex Factory
Original Article Link: https://www.forexfactory.com/news/1364085-eurusd-extremely-bullish-above-the-ascending-trendline
The EUR/USD currency pair, one of the most heavily traded in the forex market, continues to maintain a bullish outlook as it trades above a key ascending trendline. Technical analyst Justin Bennett has highlighted that the pair remains in a strong uptrend, consistently posting higher highs and higher lows, a classic indication of bullish market behavior.
As current price action develops, traders are closely monitoring key levels and trend structures to determine the viability of additional long positions. This article delves deeper into the price structure, trend dynamics, and critical support and resistance levels for EUR/USD, as well as what traders might expect next based on current technical patterns.
Market Context and Technical Structure
Bennett emphasizes the importance of the daily time frame in analyzing EUR/USD’s performance. According to his analysis, the pair has been on a consistent upward trajectory, respecting an ascending trendline stretching back several weeks. This trendline has provided a strong area of dynamic support throughout the current bullish leg.
Key characteristics of this pattern include:
– A succession of higher highs and higher lows since the recent bottom.
– A well-defined ascending trendline indicating persistent buying pressure.
– Supportive structure that suggests buyers are in control as long as price remains above the trendline.
Indicator-based analysis may be limited in this case, with Bennett urging a price action-centered approach. By focusing on the chart’s structure, traders can identify high-probability zones for buying and manage risk more effectively.
Major Levels to Watch
Bennett outlines several significant price levels traders must keep an eye on. These levels function as both potential entry points and areas where price might encounter buying or selling pressure.
Key support and resistance levels include:
Support Levels:
– 1.0780: A potential breakdown point if the trendline fails, marking a shift in the current bullish trend.
– 1.0850 – 1.0860: This zone aligns closely with the ascending trendline and has acted as dynamic support over the past week.
– Ascending Trendline: Running underneath the recent swing lows, this trendline has been tested and respected multiple times, reinforcing its significance.
Resistance Levels:
– 1.0970 – 1.0980: A near-term resistance zone that acted as a ceiling during the latest upward push.
– 1.1040 – 1.1050: This level aligns with previous highs from early March, signaling a potential longer-term breakout zone.
– 1.1100: A psychological barrier and historical resistance that may act as a key inflection point if tested again.
Structural Breakouts and Price Action Signals
Bennett notes that much of EUR/USD’s recent strength is tied to clean structural breakouts from previous consolidation zones. This type of breakout, based on a build-up in price near breakout boundaries, offers a clear route for price discovery once the level is breached.
Notable structural aspects include:
– Clean break above recent swing highs, signaling momentum-driven buying.
– Compressed consolidation at key resistance levels before breakouts, often indicating accumulation by high-volume participants.
– Sustained bullish candles following breakouts, reinforcing confidence in upward movement.
One of the most recent examples of this occurred when EUR/USD surged beyond the 1.0940 level, confirming bullish continuation and pushing toward 1.0980 before moderate pullback.
Potential Scenarios and Trading Implications
Traders are currently assessing multiple scenarios, depending on whether EUR/USD sustains its position above the trendline or loses momentum. Each outcome carries different trading implications.
Scenario 1: Bullish Continuation
– Price stays above the ascending trendline, finding support on pullbacks.
– Momentum increases, opening the door for fresh highs.
Read more on EUR/USD trading.