EUR/USD sets the stage for an upside reversal [Video]
|EURUSD has barely distanced itself above Wednesday’s 14-month low of 1.1528, but the recent faint bullish attempt could still see further continuation according to the technical picture.
First the pair seems to have created a bullish inverted hammer candlestick near its recent lows before rotating higher – a sign that buyers could gain confidence in the near term. Then, the RSI and the fast-Stochastics have both registered a higher low after bottoming out in the oversold area, while the MACD has eased its negative momentum, all endorsing improvement in market sentiment.
The 1.1600 psychological mark may first attract interest if the positive scenario materializes. This is also where the red Tenkan-sen line, which has been curbing upside movements since the start of September, happens to be. A violation at this point could extend up to the 20-day simple moving average (SMA) at 1.1663, while within breathing distance, the 23.6% Fibonacci of the 1.2265 – 1.1528 down leg could motivate some selling ahead of the 1.1753 restrictive region.
In the big picture, however, only a sustainable move above the key resistance of 1.1908 and particularly a close above the 200-day SMA would dissolve the bearish trend.
Should the bulls lose the battle instead, with the price retreating below the 1.1528 trough, immediate support could develop around the challenging barrier of 1.1450, last active during the March-July 2020 period. Below that, traders may next seek footing around 1.1365.
In summary, Friday’s recovery mode is expected to continue in the short term, likely facing some restrictions around 1.1600.
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