Last week, EUR/USD saw an increase to 1.0947 before pulling back. The current outlook for this week is uncertain, with the possibility of a further increase as long as the minor support level of 1.0871 holds. If the price breaks above 1.0947, the next target could be at 1.0979. However, if the support at 1.0871 is broken, we might see a downward trend towards the 55-day Exponential Moving Average (EMA) at 1.0807 and potentially even lower.
Looking at the bigger picture, the price movements from 1.1274 are considered to be part of a corrective pattern, possibly a triangle formation that is still ongoing. A breakthrough above the resistance level of 1.1138 would be the first indication that the uptrend from the 2022 low of 0.9534 is ready to continue towards the high of 1.1274 in 2023. This scenario is more likely as long as the support at 1.0601 remains intact.
In terms of long-term perspective, it is believed that a bottom has been established at 0.9534 in 2022. A sustained break above the 55-month EMA at 1.1013 would increase the probability of a long-term reversal in the market. However, a decisive break above the structural resistance level of 1.2348 is necessary to confirm this reversal. On the other hand, if the price is rejected at the 55-month EMA, it could signal a continuation of the bearish trend towards the downward trend from the high of 1.6039 in 2008 through the low of 0.9534 at a later stage.
In conclusion, the EUR/USD pair is currently in a critical phase, with the potential for both upward and downward movements. Traders should closely monitor the key support and resistance levels mentioned above to make informed trading decisions. As always, it is essential to use risk management techniques to protect against unexpected market fluctuations and losses.