- EUR / USD deflates after a move to 1.2160.
- The 1.2050 zone offers decent support for now.
EUR / USD broke above the 1.2100 zone on Wednesday, although bullish momentum ran out of fuel near 1.2160.
If the recovery picks up steam, then the next intermediate hurdle comes in the Fibonacci retracement (from the November-January rally) at 1.2173. Higher up, there are no relevant levels until this year’s peak in the 1.2350 area.
A further decline is expected to meet initial support at the 1.2050 region, where the recent lows and the 55-day SMA coincide. A deeper pullback carries the potential to challenge the psychological support at 1.20, although a move below this level is not favored on the short-term horizon. Below 1.2000 is a Fibonacci level at 1.1976.
In the bigger picture, the constructive stance of the EUR / USD remains unchanged while it is above the critical 200-day SMA, today at 1.1614.
Looking at the monthly chart, the (solid) breakout of the 2008-2020 trend line is a big bullish event and should support the continuation of the current long-term trend.
EUR / USD day chart
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