EUR/USD Price Analysis: Risks pullback after four-day winning run


  • EUR/USD's 4-hour chart shows a bearish indicator divergence. 
  • The pair could witness a pullback to 1.11, having failed to keep gains above 1.12 during the overnight trade. 

EUR/USD closed out in green for the fourth straight day on Tuesday, confirming the longest daily winning run since the end of December. Back then, the common currency had rallied for four consecutive trading days, starting from Dec. 26 to Dec. 31. 

At press time, the pair is trading at 1.1168, having hit a two-month high of 1.1214 on Tuesday. Notably, the common currency has risen by 400 pips in a near 90-degree manner in the last 12 days, erasing over 90 percent of the sell-off from 1.1240 to 1.0778 observed during the seven weeks to Feb. 20. 

The surge seems to have put the bulls back into the driver's seat. However, rise to the immediate resistance at 1.1240 could be preceded by a pullback as the 4-hour chart relative strength index is beginning to diverge in favor of the bears. As noted earlier, the pair rose above 1.12 on Tuesday, however, the RSI did not confirm it by setting a higher high. 

The hourly chart RSI is also reporting a bearish divergence. The spot, therefore, could retreat to 1.11 on Wednesday. A violation there would expose the ascending 100-hour average at 1.1051. On the higher side, a move above 1.12 would shift the focus to the resistance at 1.1240 (Dec. 31 high). 

4-hour chart

Trend: Pullback likely

Technical levels

EUR/USD

Overview
Today last price 1.1168
Today Daily Change -0.0012
Today Daily Change % -0.11
Today daily open 1.118
 
Trends
Daily SMA20 1.0918
Daily SMA50 1.1033
Daily SMA100 1.1059
Daily SMA200 1.1099
 
Levels
Previous Daily High 1.1214
Previous Daily Low 1.1095
Previous Weekly High 1.1053
Previous Weekly Low 1.0805
Previous Monthly High 1.1089
Previous Monthly Low 1.0778
Daily Fibonacci 38.2% 1.1168
Daily Fibonacci 61.8% 1.1141
Daily Pivot Point S1 1.1113
Daily Pivot Point S2 1.1045
Daily Pivot Point S3 1.0994
Daily Pivot Point R1 1.1231
Daily Pivot Point R2 1.1282
Daily Pivot Point R3 1.1349

 

 

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