EUR/USD reverses near 1.1300 after posting 2½-month high.
EUR/USD reached a two-and-a-half-month high of 1.1347 on Friday as the pair exited from the medium-term descending channel in the preceding days, signaling further upside movement. Prices are currently developing near the 1.1300 level and are remaining above the Ichimoku cloud and the 20-and 40-day moving averages.
Despite today’s pullback, the bullish picture is further supported by short-term technical indicators. The MACD is strengthening its momentum above the trigger line, while the stochastic oscillator is entering the overbought territory.
To the upside, immediate resistance could come at the 1.1325 area, taken from peaks on April 12, while above that, the next major resistance to watch is the 38.2% Fibonacci retracement level of the down leg from 1.1815 to 1.1106 near 1.1380.
Should prices reverse lower, support could be faced at the 1.1275 barrier, which is the 23.6% Fibonacci mark. Slightly lower, the 1.1260 area could be penetrated before the pair heads towards the moving averages, currently around 1.1200.
To sum up, the short-and medium-term picture shifted from bearish to bullish after the violation of the downward sloping channel and the 1.1300 psychological level. Traders should turn their attention to the upside if there is a jump above Friday’s peak.
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