Technical Analysis – Has EURUSD started a new bullish cycle?
August 30, 2023 3:27 pm
EURUSD picked up steam after German headline CPI inflation arrived slightly higher than expected. A downward revision in the US Q2 first estimates and a surprise dip in the private ADP employment report added extra impetus to the price, sending it as high as 1.0944.
The market aims for a new bullish cycle following the bounce on the 200-day exponential moving average (EMA), which established June’s and March’s rebound as well. An extension above the 20- and 50-day EMAs could last till the 1.0985 barrier, which overlaps with the 38.2% Fibonacci retracement of the 1.0515-1.1274 upleg. But a real test could take place higher near the broken support trendline at 1.1040. The bulls will have to climb that wall to eliminate downside risks, and hence motivate fresh buying towards the 1.1100 level.
In technical indicators, the RSI has pierced through its 50 neutral mark and the MACD has inched above its red signal line for the first time since the end of July, flagging more progress ahead. That said, the indicators will need to sustain strength above their neutral levels to confirm a bullish bias.
In the event the price closes below its shorter-term SMAs and back below 1.0895, it may again seek protection near the 200-day EMA at 1.0800. If that floor cracks this time, selling pressure could intensify to 1.0730, and then down to 1.0634-1.0680.
All in all, a new bullish cycle seems to be developing in EURUSD, but traders might consider it a temporary phase unless the recovery survives above 1.1040.
EURUSD picked up steam after German headline CPI inflation arrived slightly higher than expected. A downward revision in the US Q2 first estimates and a surprise dip in the private ADP employment report added extra impetus to the price, sending it as high as 1.0944.
In technical indicators, the RSI has pierced through its 50 neutral mark and the MACD has inched above its red signal line for the first time since the end of July, flagging more progress ahead. That said, the indicators will need to sustain strength above their neutral levels to confirm a bullish bias.
In the event the price closes below its shorter-term SMAs and back below 1.0895, it may again seek protection near the 200-day EMA at 1.0800. If that floor cracks this time, selling pressure could intensify to 1.0730, and then down to 1.0634-1.0680.
All in all, a new bullish cycle seems to be developing in EURUSD, but traders might consider it a temporary phase unless the recovery survives above 1.1040.
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