The EUR/USD, the most traded currency pair in the market, is at a decisive juncture, testing a critical resistance level that has the potential to set the tone for the coming days or even weeks of trading. The importance of this level cannot be overstated—it has acted as a barrier since late November, with no daily candles closing in this area. Instead, this area has been characterized by the presence of upper and lower wicks, making it a "no man's land" where neither buyers nor sellers have taken definitive control.
Today, the market watches closely as EUR/USD challenges this resistance zone once again. A daily candle closing above this orange-marked area would be a game-changer. Such a close would signify a higher high, a clear bullish signal that could open the doors for mid-term upside potential. Traders could interpret this breakout as an invitation to go long, marking a shift in sentiment that could dominate the market narrative.
However, sellers are not giving up without a fight. The resistance level remains fiercely defended, and any failure to close above it could present opportunities for bearish setups. A shooting star formation, with a long upper wick and a small real body near the session's low, would indicate rejection of higher prices and could prompt short positions. Similarly, a daily candle with a long bearish body would highlight seller dominance and suggest a potential reversal.
The stakes are high at this resistance. If EUR/USD breaks above, it signals bullish momentum. Conversely, a rejection would reaffirm the strength of this barrier, possibly leading to a pullback. As traders, monitoring the daily candle close and the formation of potential reversal patterns is essential to capitalize on the next directional move.