The EURUSD has displayed a notable change in direction after establishing an inverse head and shoulders pattern on the hourly chart. This pattern was validated by a breakout through the neckline, indicating a transition in trend from a bearish phase to a bullish one. The zigzag upward movement combined with a reversal in the Moving Average (MA) reinforces the signal that a consistent strengthening momentum is currently forming. This combination of technical signals emphasizes that previous selling pressure has waned, with buyers starting to take charge of the market.
Moreover, the Stochastic indicator rising from the oversold area further enhances the potential for continued upward momentum. This situation reflects a new buying impulse following an extended period of selling pressure. If this momentum persists, EURUSD has the opportunity to test important resistance levels around 1.16615 during the upcoming evening session in the US, which also represents the next psychological barrier. A breakout above this level could open the door for broader strengthening targeting the next technical objective, marking a more stable bullish phase in the short term.
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However, traders should remain vigilant regarding price dynamics around this key resistance. A failure to breach this resistance area during the US session tonight could trigger a brief technical correction before the upward trend resumes. Conversely, if prices can stay above the neckline, which now acts as a new support level, this will enhance the bullish structure currently forming. Overall, the combination of technical signals and current momentum indicates that EURUSD has potential for continued strengthening, with the main focus on confirming movement above the critical resistance level.
Technical Reference: buy as long as above 1.16080
Potential Take Profit 1: 1.16520
Potential Take Profit 2: 1.16615
Potential Stop Loss 1: 1.16175
Potential Stop Loss 2: 1.16080
