The EURUSD has dropped, hitting a new low for this trading week and returning to an important swing area that was identified between April and November 2021. On the hourly chart, the price rose above this swing area at the end of June and reached its highest point of the year last week, based on data going back to 2021. Earlier today, the price tested this area, bounced back, and met the 100-hour moving average. Sellers took positions against this level, which led to a downward push during the early US session because of increased USD buying, moving the pair back into the swing area.

Key Levels To Watch

If the EURUSD drops below 1.1663, it could lead to more selling, targeting the swing area between 1.1614 and 1.1629. This article examines the price movement of the EURUSD pair. Recently, it fell lower and returned to a well-defined zone that marked several turning points in 2021. Now that it has crossed below this area, we see a new weekly low. On the hourly chart, it is clear that the EURUSD had broken through this territory in late June before sharply rising towards this year’s peak. Earlier today, the price approached the lower boundary of this region, bounced slightly, and found sellers near the 100-hour moving average, which often acts as a temporary barrier in weaker markets. When the price reached that level, sellers took action. This resistance held firm, and strong demand for the US dollar pushed the pair back down. Now, with the EURUSD back within the familiar 2021 range, the focus shifts to a key lower boundary around 1.1663. If the price drops below this point decisively, momentum traders may push it even lower. Attention will then turn to the next range of historical levels between 1.1614 and 1.1629. These levels aren’t arbitrary; they reflect past congestion areas that the market has frequently tested and respected.

Trading Strategies

For traders focused on short-term bets, the price action around these key levels is very informative. It’s not just about breaking through a level; it’s also important to see if it holds during any retests. The strength and timing of the price movements can greatly influence trading decisions. The fact that traders engaged at the 100-hour moving average indicates careful positioning, where they waited for clear resistance before entering. This strategy helps reduce risk, especially when volatility decreases around consistently tested technical levels. Given the recent dips breaking through previously defended zones, we need to consider whether market sentiment is shifting more decisively. If this continues as a broader adjustment instead of a temporary pullback, the price movement might establish a new trend in the upcoming sessions. Based on past behaviors and the EURUSD’s reaction to historical barriers, sharp moves below known levels usually attract attention from both technical analysts and discretionary traders. This suggests that data and momentum need to align well to confirm any downward movement. From our perspective, we focus more on how the price reacts at known inflection points rather than trying to predict outright reversals. As previous structures begin to break down, evaluating strength through volume and rejections becomes essential. Create your live VT Markets account and start trading now.

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