EURUSD bouncing off crucial support zone, potential for upside momentum

Earlier, I highlighted a key support zone in EURUSD, defined by a cluster of critical technical levels:

• 1.04065 – 38.2% retracement of the move up from the February low
• 1.0401 – Swing low from February 19
• 1.0405 – 50% retracement of the EURUSD trading range since the 2022 low

This confluence of support levels created an area where price could pause or reverse. The day’s low bottomed at 1.03998 before staging a modest bounce to 1.0414. While the rebound is minor, holding above 1.0400 could allow room for further upside movement.

Key Upside Targets

• 1.04338 – 38.2% retracement of today’s move lower (see 5-minute chart)
• 1.0444 – 50% retracement, reinforcing a potential shift in momentum

If EURUSD fails to break back above 1.04338 which is the 38.2% of the trend move lower today (see 5 minute chart below), sellers will remain in control, signaling that the bounce is weak. The sellers remain in control and the buyers are not winning. However, a move above 1.0444 would give buyers more confidence, potentially setting the stage for a stronger recovery.

For now, 1.0400 remains the key downside level—holding above it keeps the door open for further gains, while a break below would confirm continued bearish control.

This article was written by Greg Michalowski at www.forexlive.com.