Breakout Alert: Will EURUSD Defend its Key Dynamic Support?
09 May 2023
In today's technical analysis, we'll be looking at EURUSD, which is currently testing a key dynamic support level. A breakout below this line could signal a good opportunity to go short, but what are the chances of that happening? Since mid-April, EURUSD has been mostly moving sideways, and not even NFP or interest rate decisions for both economies were able to change the status quo. However, this state cannot last forever, and sooner or later, we should see a breakout of either the upper horizontal resistance or the lower dynamic support.
On Tuesday, the price is hovering above the support level, and there is a risk of a breakout. However, buyers are currently defending this line, and we can see some demand. The bounce is not spectacular, but it's possible to see some buying pressure here. So, what's the plan? If the price breaks below the support level and closes near the daily lows, that would be a proper signal to go short. On the other hand, if the price bounces off the support and creates some kind of bullish reversal pattern, that would be a legitimate signal to go long. In my opinion, the first scenario is slightly more probable at the moment, so I see a downside breakout as a more favorable option