Wednesday, March 22, 2023

EUR/USD Continues To March North


edged north on Friday, breaking above the 1.1940 level, marked as a resistance by Thursday’s high. The advance continued today as well, and the pair now looks to be heading towards the high of Sept. 1, at around 1.2010.

Overall, EUR/USD is trading above a tentative upside support line drawn from the low of Nov. 4, which combined with the latest rally, paints a positive near-term picture.

If the bulls are strong enough to reach and breach the 1.2010 hurdle, then the rate will enter territories last seen back in May 2018. The next barrier to consider as a resistance may be the 1.2085 level, which is the high of May 1 of that year. That said, if that level is not strong enough in forcing the bulls to abandon the battlefield, its break may allow extensions towards the peak of the day before, at around 1.2140.

Taking a look at our short-term oscillators, we see that the RSI has just poked its nose above 70 and continued to point up, while the MACD runs above both its zero and trigger lines, pointing north as well. Both indicators detect strong upside speed, which increases the chances for this exchange rate to keep rising for a while more.

In order to abandon the bullish case, we would like to see a slide below last Thursday’s low, at 1.1885. The move would not only confirm a forthcoming lower low, but would also take the rate below the aforementioned upside line. The bears may then get encouraged to shoot for the 1.1815 area, which provided decent support on Nov. 16, 19, and 23. Now in case that zone doesn’t hold this time around, a break lower may pave the way towards the low of Nov. 12, at around 1.1760.

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