Technical Analysis – EURUSD bullish in the near-term; crosses above 1.09

Posted on May 2, 2017 at 7:12 am GMT by the XM Investment Research Desk

EURUSD has moved higher since the day’s open, crossing above the 1.09 handle along the way. The pair has been trading above the 200-day moving average (MA) since April 24.

A positive alignment occurred in late April when the Tenka-sen line (red) crossed above the Kijun-sen (blue). This short-term bullish signal is reinforced by the RSI indicator, which is currently at 67, well above the 50 neutral-perceived level. Do note though this level’s proximity to the 70 overbought level.

On the upside, the five-and-a-half-month high of 1.0950 from April 26 could act as resistance. If the price moves further up, the 1.10 handle -a potential psychological level- is likely to offer additional resistance.

Should the price move lower, the current level of the 200-day MA at 1.0829 and the Kijun-sen at 1.0816 might act as a support area. Note though that in order for the price to reach this area, it would first need to fall from a fairly congested area roughly ranging from the current price level and 1.0850. Further below, the Kijun-sen, which coincides with the cloud top at 1.0758, could provide additional support.

Turning to the medium-term picture, the consolidation in prices since late last year is indicative of a neutral outlook in place.

Overall, the short-term bias is bullish and the medium-term is neutral.

Source: www.xm.com