Euro has rallied nearly 1.4% after rebounding off key confluence support last week and the medium-term outlook remains weighted to the topside while above the April open. The advance is approaching some near-term resistance targets that may offer a pullback in price- here are the levels to know.
EUR/USD DAILY PRICE CHART
Technical Outlook: In this week’s Technical Perspective, we highlighted a confluence support zone in EURUSD around ~1.2230 where basic channel support converges on the 61.8% extension of the decline off the yearly highs. Price posted an outside-day reversal off this level with the rally breaking back above the monthly open / opening-range highs. Daily resistance targets are eyed at the 2018 high-day close at 1.2709backed by the January trendline resistance ~1.2440s- a breach above this levels would be needed to mark resumption of the broader uptrend. Key support now back at the low-day close at 1.2279.
EUR/USD 120MIN PRICE CHART
Notes: A closer look at price action see’s EUR/USD trading within the confines of an ascending channel formation extending off the monthly lows and keeps the immediate focus higher while channel support. Interim resistance targets stand at 1.2409 backed by the slope confluence around ~1.2440.
Interim support is eyed at 1.2346 backed by the monthly open at 1.2320– both areas of interest for exhaustion / long-entries. Near-term bullish invalidation rests with the monthly low-day reversal close at 1.2279– a break there would suggest the broader correction is still underway and risks a drop towards 1.2230 & or even 1.2167.
Bottom line: Euro has rebounded from BIG weekly support and we’ll favor fading weakness while above the monthly open. Ultimately a breach above 1.2440s would be needed to fuel the next leg higher. Note that near-term momentum is still deep in overbought territory and we’ll be looking for a pullback to offer re-entry.