Bullish Continuation Hinges on Resistance Breakout

Most Read: Gold Prices Sink, Support Breakdown Heralds More Weakness; XAU/USD Key Levels

Since mid-April, EUR/USD has experienced a steady climb, reaching its highest point since late March earlier this month. Recently, however, the currency pair reversed course, dropping nearly 1% from its peak before stabilizing around the 1.0800 mark. From there, the exchange rate has begun to rebound, gradually approaching 1.0850 at the time of writing.

From a technical standpoint, EUR/USD appears biased to the upside, an assessment evidenced by higher highs and lows and the pair’s position above its 200-day and 50-day SMAs. To solidify this bullish outlook, a decisive move above 1.0865 is required – a confluence resistance zone where a key descending trendline intersects with the 50% Fibonacci retracement of the 2023 decline.

If EUR/USD breaches the 1.0865 barrier decisively, especially with a volume surge surpassing previous session’s activity, breakout traders are likely to take notice, prompting them to join the move. This influx of traders betting on further gains could propel prices even higher, potentially igniting a rally towards 1.0980, March’s swing high. Although the progression may not be linear, the likelihood of this advance is elevated.

In the event of a bearish shift, initial support can be identified near 1.0810. Should prices fall below this floor, attention will turn to the 200-day simple moving average at 1.0785. It is essential for prices to stay above this technical zone; otherwise, the bullish theory would be invalidated. In such a scenario, it wouldn’t be surprising to see sellers launch an attack on 1.0725.

Want to know where the euro may be over the coming months? Explore all the insights available in our quarterly forecast. Request your complimentary guide today!

EUR/USD PRICE ACTION CHART

EUR/USD Chart Created Using TradingView