Forex Technical Update
The EUR/USD looks to be in a bullish breakout in the 1H chart after breaking above last week's declining resistance as well as the week's high. However, even though the market broke through last week's high and the 1.3930 resistance level, there is a throwback from the 1.3950 handle. To start the US session, the market hangs above the confluence of support at the 1.38 level (previous pivot and 50% retracement). With some elbow space, we can still consider the breakout to the upside to continue if the market stays above the 1.3770, 61.8% retracement level. Note the RSI reading in the 1H chart about to test 40 after kissing 70. A classic signal of bullish continuation is support above 40 and a return above 60.
The 4H chart gives us a sign of a bullish market as well because price is trading above the 200 period simple moving average and action is leaving it after failing a few times to come back under it. The RSI reading shows maintenance of the bullish momentum after last week's consolidation. A hold above the 1.3770-1.38 area during the Monday US session will signal a test of 1.3950 again with an upside bias to break toward the 1.40 clip. Otherwise, the market could still be range-bound with the next level of support seen at 1.3680-1.37.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.