- EUR/USD surged past the double-top resistance near the 1.1910-15 region.
- The stage seems set for a move beyond the key 1.2000 psychological mark.
- Overbought conditions on short-term charts warrant some caution for bulls.
The EUR/USD pair spiked to the highest level since May 2018, further beyond mid-1.1900s during the early North American session, albeit quickly retreated few pips thereafter.
A sustained move beyond the previous double-top resistance near the 1.1910-1.1915 region was seen as a key trigger for bullish traders. Adding to this, the formation of an upward sloping channel – extending from the 1.1700 neighbourhood – supports prospects for additional gains.
However, overbought conditions on hourly/daily charts capped the pair near the trend-channel resistance. This makes it prudent to wait for a sustained breakthrough the mentioned barrier, around the 1.1960-65 region, before positioning for any further appreciating move.
Nevertheless, the pair seems all set to aim to reclaim the key 1.2000 psychological mark. Some follow-through buying has the potential to continue boosting the pair further towards the 1.2100 round-figure mark amid the prevalent bearish sentiment surrounding the USD.
Meanwhile, any profit-taking slide now seems to attract some dip-buying near the 1.1915-10 resistance breakpoint. This, in turn, should help limit any meaningful corrective slide. That said, some follow-through weakness below the 1.1900 mark might prompt some technical selling.
The pair might then accelerate the fall further towards challenging the lower boundary of the mentioned channel, currently near mid-1.1800s. A convincing breakthrough will negate the constructive outlook and turn the pair vulnerable to retreat further.
EUR/USD 4-hourly chart
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Technical levels to watch
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