The EUR/USD pair has fallen by around 170 pips over the last two days, but is now pushing higher and eyeing a re-test of the 1.1000 level. This comes after the US dollar rallied on Monday, thanks to higher US Treasury yields. However, the dollar is slipping lower today, which is good news for the euro.
EUR/USD Technical Analysis: Short-Term Support and Resistance Levels
The technical set up for the EUR/USD pair remains positive. The 20-day simple moving average (SMA) is providing short-term support, with the red line on the chart representing this level. This means that the pair is likely to continue trading higher in the short term, unless there is a significant change in market sentiment.
In terms of resistance levels, a confirmed break of 1.1000 will bring last Friday’s multi-month high at 1.1076 back into focus. This means that traders should keep an eye on this level, as a break above it could indicate that the pair is heading higher. On the other hand, support is seen in the 1.0900 to 1.0910 area.
EUR/USD Technical Analysis: Cup and Handle Pattern
One interesting aspect of the current EUR/USD technical set up is the multi-week cup and handle pattern that is continuing to play out. This pattern is bullish, and suggests that the pair is likely to continue trading higher in the medium term.
The cup and handle pattern is a technical analysis tool used to identify bullish trends. The pattern looks like a cup, followed by a handle. The cup is a rounded bottom, while the handle is a short-term consolidation period. Once the pair breaks out of the handle, it is likely to continue trading higher.
In the case of the EUR/USD pair, the cup and handle pattern suggests that the recent pullback is a short-term consolidation period, and that the pair is likely to continue trading higher in the medium term.
Conclusion
In conclusion, the EUR/USD technical set up remains positive, with the 20-day SMA providing short-term support and the recent series of higher highs and higher lows remaining intact. Traders should keep an eye on the 1.1000 level, as a break above it could indicate that the pair is heading higher. The multi-week cup and handle pattern is also bullish, and suggests that the pair is likely to continue trading higher in the medium term. Support is seen in the 1.0900 to 1.0910 area.
