- EURUSD eyes breakout above 1.0880-1.0900 for further gains
- Recent rebound is not enough to upgrade short-term outlook
- A strong rally above 1.1000 needed for bulls to seize control
EURUSD kicked off the US election day on a cautiously positive note, aiming to cross above the 1.0880-1.0900 border that has been capping bullish momentum over the past three sessions.
The 200-day moving average is acting as a lifeline for the second consecutive day at 1.0870, though some caution is still necessary as the RSI has yet to cross above its 50 neutral mark and the Stochastic oscillator is already hanging near its 80 overbought level, suggesting that buying appetite could soon fizzle out.
The 1.0900-1.0940 territory which includes the 50% Fibonacci retracement level of the April-September 2024 uptrend and it’s halfway below the 2021 top could delay increases toward the 1.1000 mark. The latter is the neckline of the recent bearish double top pattern, and a successful move higher might be needed for the pair to pick up steam towards the 23.6% Fibonacci of 1.1070.
On the downside, a drop below 1.0870 could find support near the 61.8% Fibonacci of 1.0835, but failure to hold there could squeeze the pair to 1.0780 and even toward June’s low of 1.0665.
In short, EURUSD is not out of the woods yet despite its latest upturn from a three-month low of 1.0760. To eliminate downside risks and resume its previous positive direction, the pair must sustainably run above the 1.1000 barrier.
Source by: XM Global