The EUR/USD has been drifting higher throughout the second half of June and just popped above the month’s previous high of 1.3776, rallying from around 1.3650 to test the 1.37 handle. The 4H chart shows a bullish market that might be slightly overbought in the near-term as the RSI pushes above 70. However, with the 2014-low held in June, and June’s range broken, look for buyers on a pullback after today’s breakout.
(eurusd 4h chart, 6/30)
Let’s first see if price can crack the 1.37 handle. Then if there is a pull back toward 1.36-1.3650, and the RSI is back near 40, look for traders to support the EUR/USD. Respect of 1.36 will reflect respect for June’s range as a base for a bullish outlook, which exposes the 1.3990 high on the year. A break below 1.3575 however will likely set off another bearish attempt to challenge the 1.3476 low on the year.
The daily chart shows the EUR/USD rallying back above the 200-day, which takes away one bearish signal. Also, if the daily RSI pushes above 60, it would reflect loss of bearish momentum, which adds to the bullish revival scenario.
(eurusd daily chart, 6/30)
The daily chart also reminds us that EUR/USD is at best neutral in this time-frame. The prevailing trend was since August 2012, and unless the 2014 low is taken out, the EUR/USD remains neutral-bullish in the daily chart.
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