The pressure is rising on EUR / USD and the break of 1.3260 is the confirmation to our near term bullish view. Even if the long term bearish signal, formalized in October, is still standing up with the average bearish cut at 50 days compared to 255 days (EUR / USD at 1.3910), the indexes that seem to encourage an EUR revival of strength are multiplying.
The 50 days average of 1.3050 has supported the cross in the last few sessions and now it has recovered over the previous bearish head and shoulder neck line.
At this point, an EUR / USD rally until 1.3670 (wave A might be equal to wave C in terms of mere correction) – 1.3740 (the 200-days moving average) might be possible.
In addition to the benefic effect that the time cycle of maximum 65 days should have, and that is going to culminate in the month of April, EUR is experiencing a gradual reduction of the net short exposition from the hedge funds, but most of all, there is a weekly RSI rise. This is a fundamental key that, in the 13 weeks versions, allows us to catch the EUR /USD bullish / bearish movements from 2008, moving systematically from the overbought to the oversold.
As we can see from the chart, the RSI is trying to anticipate a bullish break that might be able to anticipate a similar movement in the cross.