EUR/USD Price Forecast: A Consolidation or A Further Rally?
EUR/USD Technical Outlook
EUR/USD – Reversed Course
Last week, more EUR/USD bears eased up causing the market to surge. On Friday, the price printed 1.1147 then retreated marginally, indicating that the pair may rally further.Additionally, the weekly candlestick closed in the green with 4.0% gain.
The Relative Strength Index (RSI) crossed above 50 highlighting the end of downtrend momentum and a possible start of uptrend move.
EUR/USD Daily PRice CHART (Jan 3, 2019 – Mar 30, 2020) Zoomed Out
EUR/USD Daily Price CHART (JAN 20– Mar 30, 2020) Zoomed in
Looking at the daily chart, we noticed that last week EUR/USD reversed its direction after creating a bullish divergence i.e. a low with a lower low meanwhile a low with a higher low on RSI. On Wednesday, the market moved to current trading zone 1.0822 – 1.1241 then in the following day, the price rallied then closed above the 50-day average generating another bullish signal.
Thus, the price could be on its way for a test of the high end of the zone. Further close above 1.1300 threshold could mean more bullishness towards 1.1639. In that scenario, the weekly resistance level and area marked on the chart (zoomed in) should be kept in focus.
In turn, any failure in closing above the high end of the zone could reverse the pair’s direction towards the low end of the zone. Further close below the low end send EURUSD even lower towards 1.0498. That said the daily and weekly support levels underscored on the chart should be monitored.
EUR/USD four Hour Price CHART (MAR 10 – Mar 30, 2020)
From the four-hour chart, we noticed that on Thursday EUR/USD violated the downtrend line originated from the March 11 high at 1.1366 eyeing a test of the 1.1300 handle.
Thus, another break above 1.1153 could generate a bullish signal. This could cause a rally towards 1.1218. Although, the weekly resistance level underlined on the chart should be considered. On the other hand, a break below 1.0950 may send EURUSD towards 1.0822. Nevertheless, the daily support level printed on the chart should be watched closely.
See the chart to know more about key technical levels in a further bullish/bearish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.