EURUSD Analysis: Bouncing off Critical “Neckline” Support, Perfect Retest?

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the EURUSD for February 4, 2026.

Technical Analysis of EURUSD

EURUSD Daily Chart Insight

• The outlook remains cautiously optimistic. The broader trend favors a buy-on-dips strategy. At 1.1820, the current level presents an appealing zone for bulls to protect. Nevertheless, it’s prudent to await confirming signals—either a bullish candle that closes above the previous day’s high or an upward Stochastic crossover—before concluding the correction has run its course.
• Key Levels: The immediate minor resistance lies between 1.1950 and 1.1970, where the price must reclaim this zone to stabilize the current decline. Major resistance is located at 1.2060 to 1.2080, representing the recent swing high established in late January 2026, and a break above this level would signal the next leg of the bull run, potentially targeting the psychological level of 1.2200. On the support side, the critical pivot zone sits at 1.1820 to 1.1840, which is currently the most important level on the chart as it represents horizontal resistance from June 2025 and December 2025 that was recently broken, with the price now sitting exactly in this zone where old resistance often transforms into new support. Additional support is found at 1.1700, which coincides with the Black Moving Average and previous consolidation highs, while the floor of the consolidation channel seen in late 2025 is positioned between 1.1560 and 1.1600.

EURUSD 2-Hour Chart Analysis

• The H2 chart validates that the steep pullback seen on the Daily chart has established a bottom. The pair has ceased forming lower lows and is now constructing a base near the psychologically significant 1.1800 level. Price behavior indicates an emerging short-term trend reversal from bearish to neutral or bullish, as buyers are actively entering at the long-term support marked by the Green Moving Average.
• Breakout Scenarios: The market appears to be positioning for a reversal of the short-term downtrend, with the bullish case hinging on a clear H2 candle close above the Black Moving Average at approximately 1.1850, which would confirm the “Double Bottom” formation and likely trigger momentum buying with a target of 1.1920, aligning with the Daily chart analysis showing a bounce off the 1.1820 major support level. Conversely, the bearish scenario remains in play if the price fails to breach the Black MA, keeping the trend technically bearish on this timeframe, with the trigger being a rejection at 1.1850 followed by a drop back below the Purple MA, which would likely lead to a retest of the 1.1780 lows and seriously threaten the bullish outlook from the Daily chart if that level fails to hold.

EURUSD Pivot Indicator

• The M30 chart displays a bullish setup, as the market has effectively shifted from a corrective phase into an impulsive recovery phase on the intraday timeframe. For immediate action, traders should watch the 1.1830 level, as a break above it could unlock a swift approximately 20-pip move toward 1.1850. The bullish thesis would be invalidated only if the price closes back below 1.1815.
• Primary Bullish View: The “Step-Up” Continuation represents the primary bullish view, with the chart displaying a confirmed breakout above the Black MA. The recommended strategy is to either “Buy the Dip” or “Buy the Break,” with traders watching for either a clean break above 1.1830 or a minor pullback to 1.1815 that maintains support. The clear target for this setup is the Green MA at 1.1850.
• Bearish Risk: The “Fakeout” represents the bearish risk, as intraday breakouts can fail when volume diminishes. A warning sign would emerge if the price forms a “shooting star” candle at 1.1830 and subsequently falls back below the Black MA at 1.1815. This breakdown below 1.1815 would trap recent buyers, likely triggering a liquidation wave that pushes the price back down to 1.1790.

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