Forex Technical Update
- EUR/USD broke above last week's high of 1.4517 and also cracked the 7/27 high at 1.4535.
- This price action is seen in the daily chart as a confirmation of a declining resistance that contained a congestion pattern.
- With a break to the upside, we are at least going back towards a flatter consolidation if not a bullish continuation.
- Therefore, a possible target is the 1.4940 level high. Before that, we will need to clear the 1.4696/1.47 pivot.
- Note that although the market has a bullish stance, the RSI is showing very range-bound momentum since May. We should see a crack above 60 if the market is to rally towards 1.47, 1.4940.
- First things first, we need to see the 1H RSI push above 70 to establish bullish momentum in the short-term, which should correspond with a break above 1.4550. Then a break above the 1.4577 July-high should help confirm the bullish intent.
- Then look for a pullback to stay above 1.45, and the RSI in the 1H chart to remains above 40 in the bullish attempt.
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Fan Yang CMT
Chief Technical Strategist