Euro confused between directional movement and correction 11/5/2022

The movements of the European single currency did not witness much change within sideways movements that tended to the negative and are still confined from the bottom above 1.0500 and from above below at 1.0580; therefore, the technical outlook has not changed.

On the technical side today, and by looking at the 4-hour chart, we notice the formation of a bullish price channel that the pair tried to create during the general bearish trend; its main support is located around 1.0500, as we find the 50-day moving average trying to push the price to the upside, accompanied by the RSI losing the bearish momentum. These are technical factors that support the possibility of a rise. On the other hand, the negativity dominates the momentum indicator, accompanied by the stability of trading below the extended resistance published during the previous analysis 1.0610/1.0580.

With the conflict of technical signals and the limited trading between 1.0500 and 1.0610, we prefer to monitor the price behavior of the pair so that we are waiting for the activation of the following pending orders:

Consolidation and confirmation of the breach of 1.0580, and most importantly 1.0610, as a positive factor that enhances the chances of a temporary rise to retest 1.0700, 50.0% correction.

The decline below 1.0510 and, most importantly 1.0500 is leading the pair to complete the bearish directional movement with a target of 1.0460 and 1.0410 respectively.

Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.

S1: 1.0510	R1: 1.0610
S2: 1.0460	R2: 1.0660
S3: 1.0410	R3: 1.0710