The EURUSD daily chart shows a low support range at 1.2130 and an upper resistance range at 1.2540. The line of white dots identifies that the support area has held and a reversal bar to the upside has formed with the stochastics showing that the market is currently oversold, as well. The combination of these technical analysis patterns indicates that the market may potentially return to the upper range of resistance.
However, the average true range stop (ATR) is at 1.2380 and price will need to close above this area to continue likely higher. Typically, the price will need to gather strength in order to break through this area of resistance.
To identify whether the price has the strength to potentially break through the resistance area, analyzing the 240-minute chart for clues is prudent. In this example, the 240-minute EURUSD chart is currently overbought, which would be indicative of the market going down to test for support. However, the previous bar was a reversal bar (pivot high), indicating the next bar would be bearish and yet it is bullish, with only thirty minutes remaining for completion.
The significance of this formation (pivot high formation with the next bar forming a bullish bar) is indicative that the higher timeframe (daily chart) will, more likely than not, continue its upward movement and the 240-minute chart will likely remain overbought for the time being.
Are there clues as to where the EURUSD will likely go the first of next week, as well? Yes, today is Friday (end of the week) and currently, the weekly chart shows a bullish bar is potentially forming to end the week on a high, which will also confirm hidden divergence on the weekly. If this pattern holds at the close of the market today, then the EURUSD will potentially make another move to the upside, potentially breaking through the line of resistance formed at the ATR.