EURUSD breaks the downtrend line: 1.1240 is the gateway to a larger recovery

EURUSD is showing the first meaningful signs of recovery after a prolonged decline from the August highs. The daily chart is attempting to turn from a major support area near 1.1150, while the 4-hour timeframe has broken above its descending trendline. Momentum indicators are also improving, putting 1.1240 in focus as the next key confirmation level before a potential move toward 1.1310–1.1350.

EURUSD daily chart analysis

On the daily chart, EURUSD has been under sustained bearish pressure since the August peak, producing a clear sequence of lower highs and lower lows. The decline eventually pushed the pair toward the 1.1150 support area, where price has started to show a noticeably different reaction.

The latest candles indicate strong rejection from lower levels. After briefly extending beneath 1.1150, EURUSD recovered sharply and produced a solid bullish candle back toward the 1.1210–1.1220 region. This response suggests that sellers are no longer finding the same easy continuation at fresh lows and that buyers are beginning to defend the support zone.

The Parabolic SAR is particularly important here. During the decline, the indicator remained positioned above price, consistently confirming bearish control. The latest signal has now flipped below price, marking the first indication of a potential short-term trend reversal. A Parabolic SAR reversal alone is not enough to confirm a broader change in trend, but together with the rejection from 1.1150 it adds weight to the recovery setup.

Momentum is also beginning to improve. The CCI (14) currently stands near -49.19, having recovered from much weaker readings during the selloff. More importantly, the indicator has moved back above the -100 threshold and is climbing toward the neutral zero line. This shows that bearish momentum is fading, although CCI has not yet shifted into clearly bullish territory.

The immediate upside barrier is 1.1240. A sustained daily move above this level would confirm that the recovery is gaining traction and could open the way toward 1.1350, the next major resistance area visible on the higher timeframe.

Key Levels:

• 1.1150: Major support and the level that triggered the current bullish reaction.
• 1.1240: Immediate resistance and the first important confirmation level.
• 1.1350: Main daily recovery target.

EURUSD 4-Hour chart analysis

The 4-hour chart provides a much clearer signal that short-term market structure is beginning to change.

Since early September, EURUSD has traded beneath a well-defined descending trendline, with every recovery attempt being rejected at progressively lower levels. That trendline has now been broken to the upside, following a strong rebound from the 1.1120–1.1150 region.

The latest bullish impulse is important because price has not simply bounced from support — it has also pushed through the trendline that had controlled the entire decline. This is the first technical evidence that the sequence of lower highs is being challenged.

The Momentum (14) indicator reinforces the breakout. Momentum has risen to approximately 100.48, moving back above the neutral 100.00 threshold. This shift confirms that short-term momentum has turned positive and supports the idea that buyers are beginning to regain control.

The next test is now 1.1240. A decisive H4 close above this resistance would strengthen the breakout and reduce the probability that the move above the descending trendline is merely a temporary correction.

If buyers establish price above 1.1240, the next upside objective comes in around 1.1310, followed by the more important 1.1350 resistance area.

The 1.1150 level remains the key structural support. As long as EURUSD holds above this area, the short-term recovery setup remains intact.

EURUSD bullish recovery scenario

The daily and 4-hour charts are beginning to point in the same direction.

On the daily timeframe, EURUSD has rejected a major support zone, the Parabolic SAR has flipped below price, and CCI is recovering from bearish extremes. On the 4-hour chart, price has broken its descending trendline while Momentum has moved above the 100 level.

The next confirmation now needs to come from price itself.

A sustained break above 1.1240 would strengthen the reversal structure and expose 1.1310, followed by the key 1.1350 resistance area.

For now, 1.1150 has held, momentum is improving, and the short-term downtrend line has been broken. That makes 1.1240 the key level separating an early rebound from a broader bullish recovery.

Bullish path: 1.1240 breakout → 1.1310 → 1.1350.