In Asia-Pacific trading on Wednesday (April 22), the euro against the U.S. dollar was slightly consolidated below 1.086. The recent trend of the euro against the U.S. dollar can be said to be very unclear, but there are signs that the euro against the U.S. dollar is about to break through.
Euro/USD chart
The euro has been directionless for most of the past few weeks, and the continuous creation of doji candles on Monday and Tuesday shows that the EUR/USD market still lacks a clear directional bias.
A Doji candle occurs when an asset trades both ways during a specific period but ends the period at a fixed price. While its impact depends on the circumstances, it is widely seen as a sign of indecision in the market. A doji after a prolonged rally indicates buyer fatigue, while a doji after an apparent sell-off is considered a sign of seller fatigue.
Taking EUR/USD as an example, following last Thursday’s downside breakout of the rising trendline from the March 3 and April 6 lows, there were consecutive doji candles, signaling seller indecision.
As a result, the immediate bearish outlook was offset. A break below the low of Tuesday's doji candle would restore the bearish view and open the door to a retest of the 2020 low at 1.0636.
Looking at the higher side, Monday’s high is a level that bulls can beat.
Daily chart of EUR/USD
Today’s trend of EUR/USD: Neutral
EUR/USD trend analysis: A breakthrough may come soon
Even if a breakthrough is difficult to see on the daily chart, this is not the case on the monthly chart. After the past few weeks, After the directionless fluctuations of EURUSD, the trading range of EURUSD gradually narrowed, trying to build a wedge shape. Such a mentality means that low volatility may soon give way to high volatility, and EUR/USD may soon experience sharp swings.
The current EUR/USD is still above the long-term trend line that has been extended since 1985. This is indeed a long-term support line, so it will take some time to break through. In other words, if the EUR/USD subsequently falls below 106.36 (March low), it will be regarded as a trigger, because this is a certain distance away from the long-term trend line. On the contrary, even if the attempted rebound is weak, the euro has so far not established the basis for further gains, but we cannot rule out this possibility. If it subsequently breaks above the wedge pattern and trades above 1.0991, it will be seen as gaining momentum for further gains.
Euro/USD trend monthly chart
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