EUR/USD reached a new three-year high of 1.2136 during European session today and touched the upper boundary of the Bollinger band breaking the 1.2090 strong barrier.
The euro currency is poised for an upward movement against the greenback and could extend those gains until the 161.8% Fibonacci extension level, at 1.2420, from the down-leg with the low at 1.1550 and the high at 1.2090.
If the 1.1910 support fails, then the focus would shift to the downside towards the 50.0% Fibonacci mark at 1.1820, which if breached, would increase downside pressure until the 38.2% Fibonacci level at 1.1760.
In the daily timeframe, the price posted the second consecutive green day following the strong rebound on the 1.1910 support level, which overlaps with the 20-day simple moving average of the Bollinger band. Moreover, the RSI indicator is pointing north in the positive territory, approaching the overbought zone, signaling further bullish tendency, while the MACD oscillator has just created a bullish crossover with its trigger line.
Having a look at the weekly timeframe, the world’s most traded currency pair is still developing within an ascending move since last January and is on track to post its fourth bullish week in a row.
by Melina Deltas, XM Investment Research Desk