EURUSD has been on a tear, extending its rally from 1.0795 to reach new highs. This analysis examines the technical outlook and explores potential scenarios for the currency pair.
Uptrend on a Roll: Can the Rally Continue?
- Rising Prices: EURUSD has displayed a strong uptrend, reaching a high of 1.0949.
- Rising Trend Line Support: As long as the price remains above the rising trend line on the 4-hour chart, the uptrend is likely to continue. This trend line has been acting as dynamic support, and a sustained break above it has been a key driver of the recent rally.
- 1.1000 Target: The next potential upside target for the bulls is the 1.1000 area, a psychological round number that could act as resistance.
Support Levels to Watch: Bulls Need to Defend
- 1.0920 Initial Support: While the momentum is currently bullish, it’s important to acknowledge potential downside risks. The initial support level to watch is at 1.0920. A decline below this level could indicate a short-term correction and potentially bring the price back towards the rising trend line.
- Trend Line Support Crucial: A breakdown below the rising trend line support would be a significant development. This could signal a completion of the uptrend and a potential shift in momentum towards the downside.
Overall Sentiment:
The technical outlook for EURUSD is currently bullish. The uptrend remains intact as long as the price holds above the rising trend line. However, close attention should be paid to the mentioned support levels, particularly the trend line, to gauge the strength of the uptrend and identify potential reversal signs.