- EUR/USD bulls have been in control in a strong hourly to resistance.
- A 38.2% Fibo retracement of the hourly impulse could be on the cards before advancement to 1.2110.
As per this week's, The Watchlist: GBP/JPY, EUR/USD, CHF/JPY and more setups in the making, the euro is making upside progress to complete a significant correction of the M-formation's bearish leg.
The week started off favourably for the US dollar but a snapback in US Treasury yields is enabling recovery in the forex space which plays into the hands of the euro bulls.
This exposes the neckline of the M-formation and target of 1.2110.
Prior analysis, daily chart
The M-formation is a bullish pattern where the price would be expected to revert back to test the neckline and prior support, or, to at least the 38.2% Fibonacci level.
Live market, daily chart
Live market, hourly chart
The hourly conditions are highly bullish with the 10 SMA crossing up the 21 SMA and MACD turning positive, albeit lagging the recent rally in the price to resistance.
Therefore, a pullback can be expected to test prior resistance and the confluence of the 38.2% Fibonacci retracement.
If the bulls commit at that juncture, then an advance to the neckline of the daily chart's M-formation is a high probability to complete a 50% mean reversion of the latest bearish leg.
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.