EUR/USD continues its struggle to find a direction

• The EUR/USD is being squeezed in a narrowing price range or the pennant pattern.
• Friday's US non-farm payrolls figure could trigger a much-awaited range breakout.

The EUR/USD could be in for a big move soon, having spent more 1.5-month in the narrowing price range or pennant pattern.

As of writing, the top end of the pennant is seen at 1.1723 and the lower end is located at 1.1608. The currency pair will likely adopt a strong bullish/bearish bias depending on the direction of the breakout as longer the duration of the consolidation, bigger the breakout (bull/bear) tends to be.

However, the pennant breakout may not happen today as the Eurozone economic calendar is light. Meanwhile, no first tier data are scheduled for release in the US.

As a result, the EUR/USD pair will likely continue trading the ever-tightening ranges and could see a big breakout after tomorrow's non-farm payrolls release.

A big miss on the payrolls and wage growth figure could trigger a bullish pennant breakout. The currency pair has created back-to-back doji candles along the 20-month moving average, signaling indecision among the bears. So, it is safe to say the odds are stacked in favor of a bullish move.

That said, an above-forecast reading would put the focus bank on the Fed-ECB divergence and could yield a downside break of the pennant setup.

EUR/USD Technical Levels

At press time, the currency pair is trading at 1.1650, having clocked a high of 1.17 on Wednesday.

Resistance: 1.1673 (50-day MA), 1.1723 (pennant resistance), 1.1852 (June 14 high).

Support: 1.1608 (pennant support), 1.1575 (July 19 low), 1.1508 (June 21 low).\