EUR/USD - Bullish outside day, crowding out weak bears?

EUR created bullish outside day candle yesterday.
Has moved back above the double top neckline.
The EUR could be crowding out weak bears, but downside limited.

EUR/USD staged a solid rebound from 1.2173 (38.2% Fib R of 1.1554- 1.2556) yesterday and rose to 1.2773, engulfing the previous day's high and low.

As of writing, the spot is trading on the front foot at 1.2287, meaning the pair has moved back above the double bottom neckline of 1.2206 (Feb. 9 low) in a convincing manner, trapping the bears on the wrong side of the trade.

However, currency pairs often shake out weak hands immediately after a bullish/bearish breakout. Further, the daily relative strength index (RSI) remains below 50.00 (in the bearish territory) and the 5-day moving average (MA) and 10-day MA are trending lower, indicating a short-term bearish setup. So, it could be said that EUR is crowding out weak bears.

That said, the EUR is backed by Eurozone current account surplus and hence will have an edge over the US dollar if trade wars escalate. So, the downside scope in the EUR is limited.

EUR/USD Technical Levels

A daily close above 1.2355 would add credence to the bullish outside day candle and open doors for 1.2402 (61.8% Fib R of 1.2556-1.2154). A violation there would expose the recent high of 1.2556. On the downside, a move below 1.2154 (previous day's low) could yield a sell-off to 1.2089 (Jan. 4 high) and 1.2055 (50% Fib R of 1.1554-1.2556).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M		Neutral	Expanding
1H		Overbought	Expanding
4H	Bullish	Overbought	Shrinking
1D	Bearish	Neutral	Shrinking
1W	Bullish	Neutral	High
Updated Mar 2, 04:15 GMT

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.