EURUSD Technical Analysis

December 29, 2024 at 09:25PM
EURUSD Technical Analysis: Key Levels to Watch for Guidance

The EURUSD pair remains a focal point for traders and investors due to its volatility and importance in global markets. In this EURUSD technical analysis, we explore crucial support and resistance levels, as well as trends shaping the currency pair’s behavior in the near term.

Strong Historical Support Zone: 1.0340 – 1.0350 for the Euro-Dollar Pair

One of the most critical levels for EURUSD is the long-term support established between 2017 and mid-2022 at approximately 1.0340. This key level was pierced briefly on November 22, 2024, but it has since regained its strength. Additionally, a double bottom formed on December 18 and December 20, 2024, solidifies this zone as a critical line in the sand.

Currently, the price is trading about 0.75% above this level, providing a healthy buffer. However, traders should keep a close eye on this support area for potential retests. If the price breaks decisively below it, parity at 1.0000 could act as a significant psychological magnet for market participants.

Near-Term Guidance Levels for the Euro and Dollar Pair

Moving Averages and VWAP for EURUSD

For closer guidance, the 4-hour EMA sits at 1.0414, while the VWAP from the recent December 20 low is slightly below at 1.0409. These two levels form an immediate zone of interest, with the current price hovering just above them. Should the price breach these levels, the next support lies at the low of December 24, 2024, around 1.0384.

Consolidation Zone: 1.04 for EURUSD

The zone around 1.04 acts as an important technical area. If breached, it may pave the way for a retest of the 2017 low. On the upside, a bounce from this zone could reinforce bullish sentiment in the short term.

Resistance and Upside Potential in the Euro-Dollar Market

On the upside, a notable resistance range lies between 1.0460 – 1.0470. This level has the potential to attract partial profit-taking as it coincides with recent price highs. Further bullish momentum beyond this resistance may indicate the formation of a bear flag, extending the recovery from the December 18 low.

Key Psychological Barrier: 1.0000 for EURUSD

While not immediately in play, parity at 1.0000 remains a critical psychological barrier for EURUSD. If the price breaches the 2017 low decisively, this level will likely become a focal point for traders and institutions alike.

Summary and Guidance for EURUSD Traders

Support Levels:

1.0340 – 1.0350: Long-term critical support.

1.0384: December 24 low.

1.04: Immediate guidance zone.

Resistance Levels:

1.0460 – 1.0470: Key short-term resistance.

1.0000: Long-term psychological magnet.

EURUSD traders should keep these key levels in mind as the pair navigates critical support and resistance zones. While the current trend shows consolidation above the 2017 low, price action near 1.04 and 1.0340 will provide the clearest signals for near-term direction. As always, monitor the charts closely and adjust your strategy accordingly.

Stay tuned for more updates on EURUSD technical analysis and insights into the evolving market trends.

This article was written by Itai Levitan at www.forexlive.com.