EUR/USD Technical Analysis: Bullish Pennant Formation and Key Levels

Source: Dukascopy Bank SA
Price action is forming a classic Bullish Pennant pattern, a continuation pattern that typically appears after a strong upward movement, signaling that the market is taking a brief breather before potentially resuming its original trend. The pattern begins with a sharp, near-vertical move up, known as the flagpole, which represents strong buying momentum starting around the 20th. Following this, the price enters a narrow range marked by two converging trendlines: the upper resistance line slopes downward, while the lower support line is either slightly upward or relatively flat.





Currently, the price is testing the upper trendline, and a decisive candle close above this resistance would confirm a breakout, with the potential target often calculated by projecting the height of the initial flagpole upward from the breakout point. Key levels to watch include the upper descending trendline near 1.1730, the lower ascending trendline near 1.1710, and a secondary horizontal resistance at 1.17528, which may act as the first significant hurdle following a breakout.
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