EURUSD continues to trade above 1.05 and coming close to 1.06 but never actually reaching it. So far, each attempt has been rejected below 1.06. 

By the look of it, the action on the charts suggests the top may be near, but with a possibility that EURUSD makes an attempt above 1.06. The case for this is also confirmed by the existence of an important Fibonacci area just above 1.06. It is often the case that Fx pairs enter a strong Fibonacci area only briefly before reversing. This results in grabbing the stop losses (usually of small retail traders) just above the important chart zone before the market continues in its intended direction.

As discussed last Monday, the Fibonacci confluence zone is located at the 0620 - 1.0750 area. Significant past lows (from Covid March 2020 crash) also concur here with the Fibonacci levels. It will be no surprise if the current juncture proves as the “perfect setup” to re-enter short EURUSD. A bearish signal or pattern on lower timeframes could give an early hint whether the pair will test further higher to 1.0750 or reverse sooner.

To the downside, the 1.03 – 1.0350 zone is the first support ahead of parity (1.00).