As the EUR/USD rallies, let’s examine a few targets that traders might use.
1) There is a support/resistance pivot in the 1.15-1.1533 area. With the RSI around 70, this area can provide resistance.
2) There was a price bottom formed between 1.0462 and 1.1040. This is approxinately 575 pips. Using a breakout projection based on the width of the price bottom, the target would be 1.1615 (1.1040 + 575 pips).
3) The 38.2% Retracement level of the 1.3993-1.0462 decline is at 1.1811. So if price extends above 1.16-1.1615 area, this can become the next target. If traders put in another support pivot around 1.14, the 38.2% retracement level would be much more attainable than straight from the current rally, which is already pressing the daily RSI towards an overbought reading.
4) Finally, the most aggressive target at the moment would be the 1.1970-1.20 area, which involves the 200-day SMA and a key psychological level. Note that if bullish price action does extend at its current pace, a falling trendline from 1.3993 will challenge the rally. Again, this is unlikely going to be reached by the current swing, but becomes more likely if EUR/USD confirms the uptrend with another support pivot around 1.14, or even 1.15.
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