EUR/USD Bearish Momentum Now Using 1.20 as Resistance Zone

The EUR/USD is clearly breaking the long-term support trend line and daily 21 ema zone. How important is this bearish breakout? And what are the immediate targets? Let’s analyse this.

Price Charts and Technical Analysis

EUR/USD 05.03.2021 daily chart

The EUR/USD bearish breakout was already anticipated in our ABC zigzag forecast. The only difference was that the wave 2 (orange) on the 1 hour chart ended sooner than expected.

  1. A downtrend was confirmed with the bearish breakout below the 21 ema zone, 23.6% support Fib, and support lines (dotted green).
  2. This confirms a new lower low and a bearish price swing. This is probably a wave C (grey) of a larger wave 4 (pink).
  3. The main target of the wave C (grey) is the 38.2% Fibonacci retracement level at 1.1730.
  4. A bullish bounce (green arrows) at the 38.2% or 50% Fib confirms the wave 4 (pink).
  5. A deeper bearish push places it on hold (yellow circle) or invalidates it (red circle).

On the 1 hour chart, the price action has reached the -27.2% Fibonacci target. This could create a wave 4 (blue) pullback now or next week.

  1. The current bearish impulse is typical for a wave 3 (blue).
  2. The pullback should remain shallow. A bearish break confirms the downtrend (orange arrows).
  3. The intermediate target for wave 3 (green) is 1.1836.The next target zone is at 1.1750.

EUR/USD 05.03.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.