the EUR/USD is building a descending wedge triangle chart pattern. This indicates a bearish breakout sooner or later. Let’s review the key support and resistance zones.
The EUR/USD needs to break below the triple bottom at around 1.2050. This would confirm the bearish breakout below the ascending wedge and a downtrend.
The first main target is at the 1.20 support zone. Here a bullish bounce could take place but ultimately price action could fall towards 1.1875 and even 1.1750.
If price action, however, fails to show a bullish breakout, then price action could break the resistance (blue arrows). A bullish breakout could aim at the Fibonacci retracement levels.
A bearish bounce at the 50-61.8% Fibonacci could indicate a bearish ABC (purple) zigzag pattern. Whereas a deeper retracement above to the 78.6% or above is either an ABC flat or ABCDE triangle pattern.
On the 1 hour chart, the price action needs to break support (green) for a breakout lower (orange arrows). This could indicate a 5 wave (pink) pattern in wave 5 (grey).
A bullish breakout might just be a pullback in wave 4 (grey). A bearish bounce is needed at the Wizz 3 level to confirm the downtrend (red arrow).
A bullish breakout above Wizz 3 could indicate a deeper retracement towards the main resistance trend line (purple). A break above that indicates that the bears lost control and invalidates this bearish analysis (red circle).