EUR/USD Bulls Gain Momentum as Price Rebounds from Weekly Low
EUR/USD shows strength as it reaches a new intraday high, bouncing back from its weekly low. Positive signals from the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) support the Euro bulls' ongoing recovery from the support line of a symmetrical triangle formation that has been in place for a week.
It is worth noting that the MACD signals and the RSI (14) line, which is not overbought, add credibility to the Euro pair's rebound from the triangle's support line. These signals suggest that there is potential for further price gains.
In addition, the divergence in interest rate expectations between the European Central Bank (ECB) and the Federal Reserve (Fed) also entices buyers of the EUR/USD currency pair.
EUR/USD Hourly chart
However, there are notable resistance levels that the EUR/USD bulls need to overcome. The convergence of the 200-Hour Moving Average (HMA), 100-HMA, and the triangle's upper trendline highlights the 1.0720 level as a significant obstacle.
If the major currency pair manages to sustain its strength above 1.0720, there is a possibility of a swift move towards the high seen on Friday, around 1.0780.
Subsequently, the 1.0800 level may serve as a barrier during the EUR/USD pair's potential climb towards the mid-May peak near 1.0910. On the other hand, a pullback in the EUR/USD is unlikely unless the pair breaches the lower boundary of the short-term triangle, which is close to 1.0665 at the moment.
In the event that the Euro pair remains bearish below 1.0665, the low of May at 1.0635 can be considered as the last line of defense for buyers before the significant support levels of March and January come into play. These levels are located at 1.0515 and 1.0480, respectively.