The euro currency has been struggling to rally away from the 1.1000 level against the US dollar, as the recently introduced QE program from the European Central Bank weighs down the single currenciesy’s upside potential.
Weak US manufacturing data and recent comments from US President Donald Trump surrounding the need for more rate cuts has given the EUR/USD pair a much-needed boost.
EUR/USD medium-term price trend
Failure to hold price under the 1.0993 support level hints that a push higher towards the top of the EUR/USD pair’s medium-term range may be on the horizon.
The recent rally above the 1.1000 level has helped to form a bullish reversal candle on the daily time frame, and also indicates further indicates ahead.
The daily time frames shows that price is still trapped inside a large falling wedge pattern, with a breakout from the wedge falling to materialize so far this year.
Major trendline resistance and the EUR/USD pair’s 200-day moving average are currently converging around the 1.1170 level. Only a sustained breakout above this resistance area would cause traders to turn bullish towards the currency pair in the medium-term.
Until a confirmed breakout happens above the 1.1175 level, traders should be cautious towards medium-term long positioning, given the broader downtrend still in play.
EUR/USD short-term price trend
Recent price action surrounding the EUR/USD has certainly improved,. gGoing forward, multiple daily price closes above the 1.1075 are now needed.
If bulls can hold price above the 1.1075 level, it should encourage technical traders to buy the EUR/USD pair, with the 1.1100 and 1130 levels acting as the near-term targets.
Any daily price close below the 1.0994 level would negate the short-term bullish outlook, and would probably expose the EUR/USD pair to move technically selling towards the 1.0945 level.
The 1.0993 level is extremely important as it forms the 61.8 Fibonacci retracement of the current EUR/USD yearly price low to the October swing high and remains an area of extreme technical importance.
EUR/USD technical summary
Traders are turning more positive towards the EUR/USD pair in the short-term, following a quick recovery from the 1.0993 level and overall weakness in the US dollar index.
Multiple daily price closes above the 1.1075 would cause traders to turn more bullish towards the EUR/USD, while a breakout above the 1.1170 level would be a game-changer for the pair.