As the trading week has started, EUR/USD has reacted to the 4H supply zone, and the only support available to sustain the bullish trend is the daily demand zone. In this situation, EUR/USD is primarily moving within the daily and 4H timeframes, while other timeframes are not significant.
The US Dollar Index also broke below the 210-day range and then recovered back into the range zone. This may indicate either a false breakout or a pullback toward the daily supply zone before continuing lower.
If this move proves to be a false breakout and we see a break above the daily supply zone, the next supply zone for the US Dollar Index will be the weekly supply zone.
The U.S. 10-Year Treasury Yield is also below the daily supply zone, but near the bottom of the range. If it continues making lower lows, this could strengthen EUR/USD.
Based on these factors, the current trading situation is considered high-risk, and we may see multiple false breakouts.
