**EUR/USD Price Forecast: Poised to Test Crucial Long-term Support**
*Originally written by Pablo Piovano, FXStreet. This rewritten version provides an expanded and restructured analysis while maintaining the key ideas and projections of the original article.*
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The EUR/USD currency pair is approaching a critical juncture as it edges closer to a major support level not seen since the beginning of 2023. The recent price actions, market sentiment, and macroeconomic backdrop suggest that a new test of this long-standing support level is becoming increasingly likely. This article takes a comprehensive look at the current technical landscape of the EUR/USD pair, key support-resistance zones, macroeconomic drivers, and the potential scenarios that may unfold in the coming days and weeks.
### Overview of Recent Price Action
In early November 2024, the EUR/USD continues its downward trajectory, driven by persistent strength in the US dollar and lackluster performance by the euro. The pair has spent the past few sessions consolidating below the 1.0700 level, reflecting growing bearish sentiment in the market. A closer inspection of the daily and weekly candlestick patterns reveals waning momentum to the upside and a notable failure to sustain any bullish breakout attempts.
Investors should be watching closely as the currency pair eyes a test of long-term horizontal support, located near the 1.0500 region. A decisive breach below this level could trigger a significant change in trend, with long-term implications for the euro-dollar exchange rate.
### Technical Analysis
#### Key Support Levels to Watch
The most important technical support levels currently monitored by traders include:
– **1.0500 Flat Zone**: This level represents a crucial horizontal support dating back to early 2023. It has repeatedly acted as a floor, preventing deeper declines in the EUR/USD over the past several quarters.
– **1.0440**: A secondary technical support zone that could come into play if the 1.0500 area is breached. It corresponds to lows reached in October 2023.
– **1.0300 Psychological Barrier**: A round-number level that may attract significant buying interest or trigger large stop-loss orders if violated.
#### Resistance Levels in Play
As the pair struggles to gain momentum, several resistance levels may cap any bullish corrections:
– **1.0700**: This former support level has now turned into resistance. The pair failed to hold above this level in recent sessions, signaling renewed selling pressure.
– **1.0800 Near-Term Ceiling**: A recovery beyond this point would be required to shift short-term sentiment in favor of the bulls.
– **100-day Simple Moving Average (SMA) near 1.0850**: A technical barrier that has played a significant role in capping upside movements in recent months.
### Current Trend and Indicators
EUR/USD continues to trend lower below key moving averages, signaling a strong bearish bias in the medium term.
– The currency pair is trading below its **20-day**, **50-day**, and **100-day SMAs**, suggesting a firmly entrenched downtrend.
– The **Relative Strength Index (RSI)** on the daily chart hovers near the 40 mark, indicating bearish momentum but not yet reflective of deeply oversold conditions.
– **MACD Histogram** remains in negative territory with a widening gap between the MACD line and the signal line, suggesting growing momentum to the downside.
These technical readings reinforce the view that bears remain in control, with limited support until the 1.0500 level.
### Fundamental Drivers Behind Euro Weakness
In tandem with the technical breakdown, a combination of macroeconomic and geopolitical forces has pushed the euro under pressure against the US dollar:
#### Weak Eurozone Economic Data
– Recent PMI readings from major Eurozone economies remain subdued, indicating stagnant economic activity.
– Inflation readings have shown signs of easing, reducing the European Central Bank’s (ECB) urgency to tighten monetary policy.
– Business confidence surveys continue to trend lower
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