FX.co ★ EUR/USD Upside Continuation Signaled

EUR/USD edges higher again as the USDX is plummeting. The pair is about to hit the 1.2271 static resistance. A valid breakout of this level could validate further growth. The outlook remains bullish after its failure to reach a new lower low.

Invalidating the bearish divergence could bring a strong rally in the short term. I have mentioned in my previous analysis that the price has shown some overbought signs but this is not enough for us to consider going short. EUR/USD will continue to increase as long as the US dollar index drops.

EUR/USD Downside Invalidated

EUR/USD failed to reach and retest the former low at the 1.2125 static support, signaling that the bulls are still in charge. Registering a valid breakout above the 1.2271 former high and through the upper median line (UML) suggests buying.

Still, you should be careful around the immediate resistance levels as any false breakout with great separation, or any other reversal pattern that may invalidate further growth, could bring a corrective phase.

EUR/USD Trading Conclusion

Buy on a valid breakout (bullish closure and retest) above the 1.2271 high with a potential upside target at the 1.24 level.