EUR/USD Price Analysis: Hits fresh 22-month high of 1.1690 as dollar sell-off continues
- EUR/USD remains bid amid broad-based US dollar sell-off.
- Gold nears record high of $1,920 reached in September 2011.
- EUR/USD's daily RSI shows overbought conditions.
EUR/USD jumped to a fresh 22-month high of 1.1691 soon before press time, having rallied by 2% last week.
The pair printed solid gains last week and is better bid at press time despite the fragile risk sentiment. An escalation of Sino-US tensions, lingering virus concerns, and US' failure to deliver the additional coronavirus package weakened weighed over US stocks last week.
Usually, the US dollar, a global reserve, draws haven bids during risk-off. This time, however, the dollar has taken a beating against the EUR. The European Union's recent decision to approve a landmark fiscal stimulus seems to have established the common currency as a safe haven.
From a technical analysis perspective, the pair looks overbought with the 14-day relative strength index hovering at 80. So far, however, there are no signs of buyer exhaustion on the price chart. In addition, there are no signs of a dollar rebound in other markets. Notably, gold is now just $3 short of setting a new lifetime high above $1,920 (September 2011 high).
As such, the path of least resistance for EUR/USD remains to the higher side. Major resistance is located at 1.1815 (September 24, 2018 high).
On the lower side, the session low of 1.1641 is the level to beat for the selles. A violation there in the next few hours would validate the overbought reading on the RSI and yield a deeper pullback to the 10-day simple moving average at 1.1510.
Daily chart
Trend: Bullish
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
