Breakout vs. Breakdown Which Direction Will EURUSD Take
Breakout vs. Breakdown Which Direction Will EURUSD Take
Breakout vs. Breakdown Which Direction Will EURUSD Take
Breakout vs. Breakdown Which Direction Will EURUSD Take
K Karthik Raja (Market Educator & Technical Analyst)
MCA | MBA | M.Com | MSc Psychology | PGJMC | CST | MDAT | CFA Pursuant Chart Pattern:
- The chart displays a strong breakout with an upward trend.
- Previously, there was a period of sideways consolidation before the recent surge.
- The price has formed higher highs and higher lows, indicating bullish momentum.
Trend Analysis:
- The price was in a downtrend before mid-January, followed by a trend reversal.
- A bullish trend is evident from the strong price surge in late February.
- Parabolic SAR dots below the price confirm an uptrend.
Upcoming Events to Watch:
- Economic data releases like Non-Farm Payrolls (NFP), CPI (inflation), and Federal Reserve statements can impact the trend.
- ECB (European Central Bank) and Federal Reserve policies on interest rates could influence further movements.
Moving Averages Insights:
- Green line (200 SMA): Price has crossed above the long-term moving average, confirming a bullish breakout.
- Orange & red lines (short-term MAs): These are sloping upwards, indicating a shift in momentum.
- The crossover of shorter MAs above longer MAs supports a bullish outlook.
Volume Analysis:
- There was a spike in volume during the breakout, confirming strong buying interest.
- If volume remains high, the trend is likely to continue. If volume decreases, expect a pullback.
Final Takeaway:
- The market is bullish but may see a short-term pullback before continuing higher.
- RSI at 53 suggests there's still room for upside before entering overbought territory.
- Momentum (14) is slightly declining, indicating a possible minor correction.
Breakout Strategy (Bullish):
1. Entry: Buy above the recent breakout level (around 1.0920) after confirmation.
2. Target: Next resistance level (watch for 1.1000+ psychological level).
3. Stop loss: Below the last swing low (~1.0800).
4. Confirmation: Look for volume increase and RSI moving above 60.
Breakdown Strategy (Bearish):
1. Entry: Short if the price drops below 1.0800 with strong selling pressure.
2. Target: Next support level around 1.0700.
3. Stop loss: Above 1.0900 to protect from fakeouts.
4. Confirmation: Look for RSI dropping below 40 and bearish candle formations.
Disclaimer
This analysis is for educational and informational purposes only. It does not constitute financial advice. Always consult a professional before making investment decisions.
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