EURUSD reached a two-and-a-half-month high of 1.1347 on Friday as the pair exited from the medium-term descending channel in the preceding days, signaling furhter upside movement. Prices are currently developing near the 1.1300 handle and are remaining above the Ichimoku cloud and the 20-and 40-day moving averages.
Despite today’s pullback the bullish picture is further supported by short-term technical indicators. The MACD is strengthening its momentum above the trigger line, while the stochastic oscillator is entering overbought territory.
To the upside, immediate resistance could come at the 1.1325 area, taken from peaks on April 12, while above that, the next major resistance to watch is the 38.2% Fibonacci retracement level of the downleg from 1.1815 to 1.1106 near 1.1380.
Should prices reverse lower, support could be faced at the 1.1275 barrier, which is the 23.6% Fibonacci mark. Slightly lower, the 1.1260 area could be penetrated before the pair heads towards the moving averages, currently around 1.1200.
To sum up, the short-and medium-term picture shifted from bearish to bullish after the violation of the downward sloping channel and the 1.1300 psychological level. Traders should turn their attention to the upside if there is a jump above Friday’s peak.