Based on the chart you provided, the analysis suggesting that EUR/USD will drop to 1.04 could be based on several technical factors:
1. Parabolic Uptrend and Exhaustion
• The price has surged aggressively, forming a near-vertical move, which is often unsustainable. Such parabolic moves tend to correct sharply once buyers lose momentum.
2. Potential Double-Top Formation
• The recent price action shows a hesitation near the 1.09 level, which could indicate the formation of a double-top pattern, a bearish reversal signal.
3. Liquidity Grab Before Reversal
• The price may be forming a fake breakout (bull trap) before reversing. The suggested path in your chart indicates a minor pullback, followed by a sharp decline.
4. Key Resistance Zone
• The price might have hit a major resistance level around 1.09, where sellers could step in, triggering a move downward.
5. Wave Pattern Indication
• The projected price path in your chart suggests an Elliott Wave or Wyckoff-style distribution phase before a major drop.
6. Lack of Strong Support Until 1.04
• If the price fails to hold above 1.0750–1.07, there isn’t strong support until the 1.04 level, making it a reasonable target.
1. Parabolic Uptrend and Exhaustion
• The price has surged aggressively, forming a near-vertical move, which is often unsustainable. Such parabolic moves tend to correct sharply once buyers lose momentum.
2. Potential Double-Top Formation
• The recent price action shows a hesitation near the 1.09 level, which could indicate the formation of a double-top pattern, a bearish reversal signal.
3. Liquidity Grab Before Reversal
• The price may be forming a fake breakout (bull trap) before reversing. The suggested path in your chart indicates a minor pullback, followed by a sharp decline.
4. Key Resistance Zone
• The price might have hit a major resistance level around 1.09, where sellers could step in, triggering a move downward.
5. Wave Pattern Indication
• The projected price path in your chart suggests an Elliott Wave or Wyckoff-style distribution phase before a major drop.
6. Lack of Strong Support Until 1.04
• If the price fails to hold above 1.0750–1.07, there isn’t strong support until the 1.04 level, making it a reasonable target.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.