Euro vs US Dollar Technical Outlook
EUR/USD- Bullish Market
On Friday, EUR/USD rallied to an over four-week high at 1.1145 then closed the weekly candlestick in the green with a 2.5% gain.
This week, the Relative Strength Index (RSI) climbed and remained in overbought territory emphasizing the strength of uptrend momentum.
EUR/USD DAILY PRICE CHART (Oct 1, 2018 – June 5, 2020) Zoomed Out
EUR/USD DAILY PRICE CHART ( March 23 – June 5, 2020) Zoomed IN
On May 18, EUR/USD closed and remained above the 50-day moving average signaling that bulls were in charge. Today, the market has rallied to a near three-month high at 1.1383 however, the price reversed back to the current trading zone 1.1205 – 1.1370.
A close above the high end of the aforementioned trading zone may encourage bulls to push towards 1.1508 and a further close above that level could extend the rally towards 1.1639.
On the other hand, a close below the high end of the zone reflects bull’s hesitation and may reverse the pair’s direction towards the low and of the zone. A further close below that level could send EURUSD even lower towards 1.1097.
That said, the weekly support and resistance levels underlined on the daily chart (zoomed in) should be considered in both bullish/ bearish scenarios.
EUR/USD Four-Hour PRICE CHART (April 30 – June 5, 2020)
On May 25, EUR/USD rebounded from the uptrend originated from the May 14 low at 1.0774 highlighting that the bullish momentum was still intact. Two days later, the price broke above the downtrend line originated from the May 21 high at 1.1008 then steepened its rally highlighting an accelerated bullish sentiment.
A break below 1.1279 could send EURUSD towards 1.1217 in turn, any break in the other direction i.e. above 1.1433 could trigger a rally towards 1.1508. Nonetheless, the daily support and resistance marked on the four-hour chart should be kept in focus.
Written By: Mahmoud Alkudsi, Market Analyst
Please feel free to contact me on Twitter: @Malkudsi
