EURUSD has staged an impressive rally since March 31, 2021 lows registered at 1.1704 mark. EURUO bulls have extended gains today and managed to print 1.2117 today. A corrective drop might be in the making anytime soon now.
The rally between 1.1704 and 1.2117 looks to be an impulse, hence EURUSD might print yet another high after a potential corrective drop. Alternately, the currency might have already completed its counter trend rally since 1.1704 lows and might prepare to turn lower again.
Either way, EURUSD might be looking to turn lower from here and a break below 1.2000 handle will confirm. A minimum drop towards 1.1850 remains possible before the rally could resume. We shall review again around 1.1850/60 levels and take a directional call then.
Also note that EURUSD has tested a confluence of convergences around 1.2117 today. The downtrend line since 1.2350 has been hit along with fibonacci 0.618 retracement of the entire drop between 1.2350 and 1.1704 levels respectively.
The currency faces strong resistance at 1.2243, followed by 1.2350; while intermediary support is seen towards 1.1850/1.1900 levels respectively. A break below 1.2000 will open doors to test 1.1850 levels before finding some support again.
EURUSD bears might be poised to stay in control until prices remain below 1.2350 levels respectively. It is expected to turn bearish at least in the short term and push towards 1.1850 handle before turning higher again. Watch out for a bearish signal on hourly chart soon.
Finacademy Technical Team
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