EURUSD Retest Of Former Neckline At 1.1450?

EURUSD recently broke above a double bottom neckline near the 1.1450 area, confirming a bullish reversal after weeks of consolidation between the 100 and 200 SMA. Price has since pushed as high as 1.15572, though it’s now pulling back slightly and currently trades near 1.15303.

The Fibonacci retracement tool shows where dip-buyers could look to jump back in should this pullback extend. The 38.2% Fib sits at 1.14795, while the 50% level comes in at 1.14555, right around the broken neckline itself.

A deeper correction could reach the 61.8% Fib at 1.14315, which lines up closely with the 100 SMA and could be the line in the sand for this bullish pullback.

If any of these levels hold as support, EURUSD could resume its climb toward the swing high near 1.15572 or higher. A break back below the Fibs and the neckline, on the other hand, could open the door to a slide back toward the 100.00% Fib at 1.13538 or lower.

The 100 SMA has been curling higher and is now converging with the 200 SMA, hinting that the path of least resistance may be shifting to the upside as the gap between the two narrows. Price is also trading above both moving averages for the first time in weeks, which could offer additional dynamic support on dips.

Stochastic is retreating from the overbought zone, reflecting some exhaustion among buyers after the recent surge, so a bit more downside in the oscillator wouldn’t be surprising. The indicator still has plenty of room to fall before reaching oversold, meaning the correction could persist a while longer.

RSI, meanwhile, is also easing from elevated levels but remains comfortably in bullish territory, suggesting buyers could still have the upper hand once this pullback runs its course and support near the Fibs is tested.

EURUSD could take cues from leading US jobs indicators as traders position for the NFP release later in the week, as well as geopolitical developments in the Middle East that could spur a flight to safety.