Technical Analysis – EURUSD crosses above trendline, but more impetus is needed
July 7, 2023 2:28 pm
EURUSD spiked as high as 1.0930 in the wake of softer-than-expected nonfarm payrolls data, surpassing its 20- and 50-period exponential moving averages (EMAs) in the four-hour chart, as well as the resistance trendline that has been navigating the price southwards for the past two weeks.
The RSI rose decisively above its 50 neutral mark, adding credence to the ongoing bullish action, but with the price trading around the 23.6% Fibonacci retracement of the 1.0634-1.1011 upleg of 1.0922, some caution is warranted. The price could also experience a slowdown near the 1.0940 barrier as it did during the previous sessions. Should the bulls breach the latter, snapping the bearish head and shoulders pattern, all eyes will turn to the tentative descending trendline from May at 1.0980. A successful penetration higher could raise optimism for a bullish continuation above June’s peak of 1.1011.
Should the price pull below the broken resistance line and its shorter-term EMAs, the 200-period EMA could again come to the rescue around the 38.2% Fibonacci of 1.0867. An extension lower may halt around the 1.0840 neckline. Failure to hold here would worsen the short-term outlook, unless the 50% Fibonacci mark and the ascending trendline drawn from the September 2022 low prevent any declines below 1.0810. Summing up, despite the latest bullish trendline breakout, EURUSD will need extra momentum above 1.0940 to violate the downward trend from June’s highs.
EURUSD spiked as high as 1.0930 in the wake of softer-than-expected nonfarm payrolls data, surpassing its 20- and 50-period exponential moving averages (EMAs) in the four-hour chart, as well as the resistance trendline that has been navigating the price southwards for the past two weeks.
The RSI rose decisively above its 50 neutral mark, adding credence to the ongoing bullish action, but with the price trading around the 23.6% Fibonacci retracement of the 1.0634-1.1011 upleg of 1.0922, some caution is warranted. The price could also experience a slowdown near the 1.0940 barrier as it did during the previous sessions. Should the bulls breach the latter, snapping the bearish head and shoulders pattern, all eyes will turn to the tentative descending trendline from May at 1.0980. A successful penetration higher could raise optimism for a bullish continuation above June’s peak of 1.1011.
Should the price pull below the broken resistance line and its shorter-term EMAs, the 200-period EMA could again come to the rescue around the 38.2% Fibonacci of 1.0867. An extension lower may halt around the 1.0840 neckline. Failure to hold here would worsen the short-term outlook, unless the 50% Fibonacci mark and the ascending trendline drawn from the September 2022 low prevent any declines below 1.0810.
Summing up, despite the latest bullish trendline breakout, EURUSD will need extra momentum above 1.0940 to violate the downward trend from June’s highs.
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