EUR/USD Price outlook talking points:
- Gains are consolidated but still not strongly bullish.
- The week can still end on the bearish side.
EUR/USD Price outlook: Maintains its positive tone above 1.1070
It’s been a positive week so far for the EUR/USD pair, as there is an ongoing consolidation above the 200 SMA in the 4H chart. Currently, it is trading around the 1.1078 neighbourhood.
The sentiment is positive for the common currency, a surge in demand was key for the pair to consolidate gains. However, it’s still far from being a strong bullish trend.
Euro broke a bullish trendline drawn from October’s lows in November. A retracement happened which suggests a high possibility for a bullish continuation in the near-term, according to the projections in the 4 hours chart.
The nearest resistance lies at the 1.1102 level.
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Positive scenario
If a breakout happens over there, the focus will shift towards the 1.1177 zone. Where a strong supply zone that acted as a strong hurdle for buyers in October is also located.
A double top is already formed as well. Beyond such a level, the pair will focus on the 1.1230 region, which should be a strong signal that the bullish trend will strengthen for the short term. After clearing the level, EUR/USD could point towards the 1.1280 level, which acted as a critical resistance approximately a couple of months ago.
Bears with their eyes open
On the downside, there is strong support located around 1.1014, where a breakout may happen to target the 1.0946 level. After a breakout below that area, the eyes will be on the 1.0880 handle, favouring the bears’ force in the short and mid-term.
The technical oscillators remain positive in the time frame. The RSI indicator keeps its bullish tone above the 50 level, while Momentum is pointing upwards after a recovery from the lows of November, but it’s a bit weak so far.