EUR/USD finally placed a bottom and seems to be accelerating to the upside. By failing to head lower past 1.1870, the currency pair is showing strength in its correction. For now, the worst is over for the beat up currency pair. By breaking above a key resistance level of 1.2000, the pair may accelerate to the fore coming resistance of 1.2140, represented as 200-period SMA on hourly charts.
A correction phase is well defined as traders are beginning to take profits in their oversold positions. With risk aversion once again off the table and risk appetite crawling back into the markets, EUR/USD could experience a decent bounce back in a near term future. 200-period Moving Average generally acts as a threshold between an upward and a downward movement. The pair is making a decent push towards, the 200-period moving average on an hourly chart, a break of which will negate the downward rally for good. Traders which once were ultra short on the positions are beginning to take their profits, and possibly catch the correction phase of the rally. The break out from the consolidating phase with strong momentum indicated by the solid body candlesticks with greater volatility suggests that the bottom is in place, for at least now. On technical basis, the trend has shifted on the shorter term timeframes, while the overall long term trend remains to the downside. Overall, the currency pair is likely to gain strength throughout the remainder of the week.
Source: Acttrader (Forex Club)
Disclosure: No Positions