EURUSD extended its bullish rally towards a fresh almost two-year high around the 1.1600 psychological mark on Wednesday before it lost some gains.
From the technical viewpoint, the MACD oscillator is losing some momentum, but is still standing above its trigger line and well above its zero line in the short-term timeframe. The stochastic oscillator despite the drop from the overbought zone – which indicates downside retracement – is now creating a bullish crossover with its trigger and zero lines, confirming the strongly positive picture.
Immediate resistance is coming from the 1.1600 handle and a break above this crucial level could send the market towards the 1.1795 barrier, registered on September 2018. Breaching this obstacle, the door could open for 1.1850, being the high of June 2018.
In the negative scenario, a pullback could find immediate support at the 23.6% Fibonacci retracement level of the up leg from 1.1184 to 1.1600 at 1.1505, which coincides with the 20-period simple moving average in the 4-hour chart. More downside pressures could hit the 38.2% Fibonacci of 1.1440 and the 50.0% Fibonacci of 1.1390.
Summarizing, EURUSD has been in a significant upside run since July 1 and the positive picture could change only if there is a decrease below the 100-period SMA and the 61.8% Fibonacci of 1.1342.
