EUR/USD Price Forecast: Pair Holds Above 1.1700 as Bullish Momentum Strengthens
The EUR/USD currency pair has broken its recent four-day losing streak, trading firmly around the 1.1720 level during Monday’s Asian trading session. Technical indicators are signaling a bullish outlook, suggesting the pair may continue its upward trajectory in the near term.
Technical Analysis Indicates Continued Upside Potential
On the daily chart, EUR/USD is positioned just above the lower boundary of an ascending channel pattern, a formation typically indicative of ongoing upward momentum. Supporting this positive view is the 14-day Relative Strength Index (RSI), which stands at 61.63 — comfortably in bullish territory above the 60 mark. This confirms sustained buying pressure and increases the likelihood of testing higher resistance levels.
Further strengthening the bullish case is the alignment of moving averages. The nine-day Exponential Moving Average (EMA), currently at 1.1713, is not only rising but also sits above the 50-day EMA, reinforcing the positive momentum. The pair’s ability to hold above these key moving averages bodes well for continued gains, as this alignment often signals the path of least resistance points upward.
Key Levels to Watch
- Resistance: The immediate upside target for EUR/USD is the psychologically significant 1.1800 level, which closely corresponds to the two-month high of 1.1804 reached on December 16. Should the pair break above this resistance, momentum could drive prices toward the upper boundary of the ascending channel near 1.1860. Beyond that, a further rally could test the June 2021 peak at approximately 1.1918. – Support: On the downside, the initial support lies at the nine-day EMA near 1.1713, aligning with the ascending channel’s lower boundary at around 1.1710. A break below this zone could signal a loss of short-term bullish momentum and potentially push EUR/USD toward the 50-day EMA at 1.1648. Should bearish pressure intensify, the pair might retest the three-week low of 1.1589 recorded on December 1. ### Euro Performance Against Major Currencies
Today, the Euro has emerged as one of the strongest major currencies against the US Dollar, contributing to the positive outlook for EUR/USD. A comparative heat map shows the Euro outperforming the US Dollar and several other currencies, reflecting broad-based strength in the European single currency.
Market Outlook
The current technical setup and momentum indicators suggest that EUR/USD is well-positioned to advance further in the short term, provided it maintains support above key moving averages. Traders and investors will be closely watching the reaction around the 1.1800 resistance area, as a decisive break could pave the way for a continuation of this bullish trend.
Nonetheless, caution remains warranted near critical support levels, since a failure to hold above the lower boundary of the ascending channel might invite renewed selling pressure.
Author: Akhtar Faruqui, FXStreet
Akhtar Faruqui is a Forex analyst based in New Delhi, India, specializing in market trends and technical analysis to deliver insightful Forex news.
Disclaimer: This article involves forward-looking statements and technical analysis which are subject to risks and uncertainties. It is intended for informational purposes only and should not be considered investment advice. Always conduct your own research before making trading decisions.