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The Euro gained ground against the US dollar in the final trading sessions of last week, successfully consolidating above the critical resistance level of 1.0870. This consolidation serves as a compelling factor, effectively halting the anticipated downward trend. Consequently, the pair is poised to resume its upward trajectory, setting targets commencing at 1.0920 and reaching its highest point at 1.0913.
Technically, a thorough examination of the 4-hour timeframe chart reveals the pair’s successful closure above the 1.0860 level, which corresponds to the 50.0% Fibonacci retracement, as depicted on the chart. Additionally, positive support from the simple moving averages persists, bolstering the likelihood of a sustained upward trend.
With the stability of trading above the previously breached resistance, now functioning as a support level at 1.0860/1.0850, the prevailing outlook favors the upward trend. The primary target stands at 1.0940, followed by 1.0970, representing the 61.80% correction and serving as an eagerly anticipated milestone.
However, a potential shift in momentum could occur if the pair slips below 1.0850, renewing the prospects of a decline. In such a scenario, a retest of 1.0800 and subsequently 1.0750 becomes a distinct possibility.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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