EUR/USD Bullish Price Series Intact After Clearing February High

With that said, the decline from the January high (1.2350) may turn out to be a correction in the broader trend rather than a change in EUR/USD behavior as the crowding behavior from 2020 resurfaces, and the exchange rate may continue to exhibit a bullish behavior after clearing the February high (1.2243)as it extends the series of higher highs and lows from earlier this week.

EUR/USD RATE DAILY CHART

Image of EUR/USD rate daily chart

Source: Trading View

  • Keep in mind, EUR/USD established a descending channel following the failed attempt to test the April 2018 high (1.2414), but the decline from the January high (1.2350) may turn out to be a correction in the broader trend rather than a change in market behavior as the exchange rate trades back above the 50-Day SMA (1.1974) to break out of the bearish trend.
  • The Relative Strength Index (RSI) showed a similar dynamic as the oscillator reversed ahead of oversold territory to break out of a downward trend, with a move above 70 in the indicator likely to be accompanied by a further appreciation in EUR/USD like the price action seen in December.
  • EUR/USD may continue to exhibit a bullish behavior after clearing the February high (1.2243) as it extends the series of higher highs and lows from earlier this week, but need a close above the Fibonacci overlap around 1.2220 (38.2% expansion) to 1.2260 (161.8% expansion) to bring the 1.2320 (23.6% retracement) region on the radar.
  • A break above the February high (1.2243) opens up the 1.2370 (61.8% expansion) area, with the next region of interest coming in around 1.2430 (50% expansion) to 1.2440 (100% expansion).
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