The medium-term bullish rally in the EUR/USD pair is now testing the high of 8th September 2017 in the daily chart. Most of the professional traders are waiting on the sideline for a clear break of the critical resistance level at 1.20916.A daily closing of the price above the critical resistance level at 1.20916 will confirm the establishment of medium-term bullish trend and ultimately lead this pair towards the next critical resistance level at 1.23471.On the contrary, if the bears manage to take control of the market, the pair will lead towards the major support level at 1.18824.This level is going to play significant amount buying pressure to the EURO bulls as it confluences with the broken bearish trend line which is now acting as strong support level.
EUR/USD daily chart analysis
Figure: EUR/USD testing the high 8th September 2017
From the above figure, it’s very clear that the overall stance for the EUR/USD pair is bullish. The pair surged higher after it broke the triangle pattern resistance level at 1.18824.The conservative traders in the CFD trading industry are waiting for minor pull back to place their long orders. Though the overall stance is extremely bullish we need to clear the high of 8th September before seeing another strong bullish rally. On the contrary, if the pair manages to break the critical support level at 1.18824, it will head towards the 100 days SMA.A daily closing of the price below the 100 day SMA support level at 1.18089 will change the overall stance for this pair slightly bearish. Break of that level will refuel the bears in the market which will ultimately lead this pair towards the 38.2% Fibonacci retracement level drawn from the low of 20th June 2017 to the high of 8th September 2017.
EUR/USD weekly chart analysis
Figure: EUR/USD pair heading towards the long-term weekly resistance level
In the weekly chart, the bulls are in full control of this market. However the long-term investors are waiting to place long in bearish correction. Currently, the pair is testing the weekly minor resistance level at 1.20916 and weekly closing of the price above that level will confirm the establishment strong bullish rally. If the pair manages to clear the critical resistance level 1.20916, the next stop for this pair would be weekly critical resistance level at 1.23700.From that level, we might see some consolidation structure but the eventually the market will aim towards the next critical resistance level at 1.28000.
On the downside, the first bearish target for this pair would be the weekly support level at 1.15734.From that level, we might see some decent bullish bounce but a weekly closing the price below this level will lead this pair towards the next critical support level at 1.13166.This level is very crucial for the long-term traders since a clear break of the price below that level will confirm the end of a medium-term bullish rally of the EUR/USD pair.
The U.S dollar index which measures the overall value of the green buck’s strength against the six major currency pair is facing an extreme level of bearish pressure in the global market. In the last FOMC meeting minute, FED chairperson Janet Yellen come up with a dovish statement despite the rate hike decision. Most importantly she didn’t give any clear clue regarding the projected rate hike for the year 2018 which created a high level of uncertainty regarding the green buck’s strength. Considering all the technical and fundamental parameters the EURO bulls are well ahead of the race. However, any hawkish statement from the U.S president will refuel the dollar bulls in the global market. Buying the EUR/USD pair at the current price level will be an immature act. So it’s better to stay on the sideline and look for long trade setup at the deep.