After hitting resistance at around 1.1450 on March 20th, EUR/USD turned down and took a steep down road. That said, the rate hit support near the 1.1185 zone yesterday, and then, it entered a recovery mode. At the time of writing, the pair is trading slightly above the 1.1245 zone, a move that may confirm a forthcoming higher peak on the 4-hour chart and thereby encourage buyers to stay in the field for a while more.
We believe that the move above 1.1245, and subsequently a break above the 50-EMA, near which the rate is currently trading, may set the stage towards the 1.1280 zone, slightly below the high of March 27th, and also near the inside swing lows of March 13th and March 22nd. The bulls could take a small break after hitting that zone, but if they refuse to let the pair drop back below 1.1245 again, then a subsequent leg higher could result in the break of the 1.1280 hurdle, something that may open the way towards our next resistance zone, at 1.1325, defined by the peak of March 26th.
Looking at our short-term oscillators, we see that the RSI rebounded from near its 30 line, emerged above 50, and still points up. The MACD, although negative, lies above its trigger line and points north as well. There is also positive divergence between the MACD and the price action. These indicators suggest that the rate may have started gaining positive speed, which supports the notion for some further recovery, at least in the short run.
On the downside, a dip back below 1.1215 may signal that the bulls have started to abandon the battlefield and thus, another test near 1.1185 could be possible. That said, in order to start examining whether the bears have gained the upper hand, we would like to see a decisive close below 1.1175, a support defined by the low of March 7th. Such a break would bring the rate into territories last seen in June 2017 and could allow declines towards the low of the 23rd of that month, at around 1.1140.
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