Last week, EURUSD tested well into the 0620 - 1.0750 Fibonacci confluence area, which we described as the key resistance in the long-term context. As would be expected with such important technical zones, the rally was stopped, and EURUSD backed off the highs only a few pips under 1.0750.

However, the bears are not out of the woods yet here. There is still some risk for further tests higher as EURUSD is yet to make a bearish break of some key support zones. The first such support in line is the 1.0580 – 1.0600 zone, which represents the most recent previous highs. It is a support of short-term importance, which if broken, should clear the road for a further move lower.

The next support would be the 1.0450 zone, ahead of the 1.03 area. Below it, there is no big support until the parity zone (1.00).

To the upside, a break above 1.0750 would threaten a major bullish breakout on the weekly chart. While it appears an unlikely scenario, in such a case, EURUSD could quickly run above 1.10.

Also, be sure to check out our latest short EURUSD trade idea, where we highlighted a bearish harmonic bat pattern on this same daily chart.