EUR/USD closed well above 1.1216 yesterday, validating seller exhaustion signaled by Tuesday’s hammer candle.
The pennant breakout on the hourly chart – a bullish continuation pattern – indicates scope for further extension of the recovery from the recent low of 1.1184 toward the immediate resistance at 1.1275.
Even so, the bearish (descending) 10-day moving average (MA), currently at 1.1245, is proving a tough nut to crack in Asia.
A repeated failure to beat that MA hurdle would weaken the case for stronger recovery rally signaled by both the hammer reversal on the daily and the pennant breakout on the hourly and could yield a drop toward 1.12.
Daily chart
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Hourly chart
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Trend: Neutral
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