EUR/USD Tests Critical Support as Bearish Channel Approaches Decision Point

EUR/USD is consolidating near major support levels as the pair tests the boundaries of its established bearish channel formation. The currency pair has been trading in a descending channel pattern for several weeks, with current price action coiling near the lower boundary around 1.0500-1.0520 support zone. Technical indicators suggest a make-or-break moment as momentum oscillators show oversold conditions while the pair struggles to break above the channel's resistance. The dollar index remains elevated near 106.50, maintaining pressure on the euro despite recent consolidation. Traders are closely monitoring whether EUR/USD can hold above psychological support at 1.0500, as a break below could accelerate selling toward 1.0450. Conversely, a successful defense of support combined with a channel breakout above 1.0580 would signal potential trend reversal. The upcoming ECB and Fed policy decisions add fundamental catalysts that could determine the channel's resolution.