- EUR/USD reverses pullback from a six-week-old resistance line.
- Sustained trading beyond 200-SMA, firmer RSI hints at further recovery.
- The previous support from mid-May also challenges bulls, 1.0460 appears a tough nut to crack for bears.
EUR/USD picks up bids to consolidate Friday’s losses as buyers eye another battle with the short-term key resistance line. That said, the major currency pair rises to 1.0727 during Monday’s initial Asian session.
The quote’s recent rebound takes clues from the steady RSI and improvement in the market’s risk appetite. However, the bulls need validation from a six-week-old downward sloping resistance line, around 1.0760 by the press time.
Even so, 50% Fibonacci retracement of the March-May downside, as well as the previous support line from May 13, respectively around 1.0770 and 1.0825, will challenge EUR/USD buyers.
Also acting as an upside filter is the 61.8% Fibonacci retracement level and a horizontal resistance area stretched from late March, close to 1.0870 and 1.0940 in that order.
Alternatively, pullback remains elusive until the quote stays beyond the 200-SMA level of 1.0611.
Additionally challenging the EUR/USD bears is the 1.0600 threshold and multiple supports marked since late April, surrounding 1.0470-60.
Overall, EUR/USD remains on the bull’s radar but needs validation for further upside momentum.
EUR/USD: Four-hour chart
Trend: Further recovery expected