The bears made another attempt to push EURUSD to a new lower low last week, but were again rejected, and the pair closed above 1.1850 again. This was the second consecutive rejection of levels below 1.1850, which indicates that solid buying pressures exist here and strengthens the support at the lows around 1.1800.

With the stabilization of the sell-off over the past two weeks, the weekly chart looks more balanced now, and the potential for a move higher has increased. While the downside breakout of the channel and below 1.20 three weeks ago keeps the longer-term trend bearish, the fact that 1.18 has held firmly suggests that it’s not going to be an easy ride lower for EURUSD bears.

If EURUSD extends higher, the key resistance is at the “old-good” 1.20 price zone. It’s unlikely that it will be broken, aside from short-term attempts above it into 1.2050 and 1.2100, which are possible but would not break the resistance (chart). Overall, EURUSD may be starting a new range here between 1.1750 – 1.1800 as support and 1.20 – 1.21 as resistance.

The head and shoulders pattern would also be triggered with a break below the 1.1750 – 1.1800 support (see neckline). If this support area gives way in the coming weeks, it will unlock a seriously bearish scenario.