The EUR/USD currency pair, on the D1 time-frame, was in a downtrend until the 23rd of May when a lower bottom was recorded at 1.11069. The bulls found the price inviting and buyers overcame sellers.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 1.11097 and 1.11069. This could have alerted technical traders to a possible reversal in the making.
After the bottom at 1.11069 the market broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator sliced through the zero baseline into bullish terrain and the 15 and 34 Simple Moving Averages crossed, forming a so-called Golden Cross. These all confirm the possibility of a technical trend reversal.
A possible critical resistance level formed when a higher top was recorded on the 7th of June at 1.13497. Sellers then temporarily pulled the price lower and a higher bottom was registering on the 18th of June at 1.11826.
If bullish pressure cause the EUR/USD to breaks through the critical resistance level at 1.13497, three possible price targets may be expected from there. Attaching the Fibonacci tool to the top of the possible reversal at 1.13497 and dragging it to the bottom of the pullback at 1.11826, the following targets may be considered. The first target can be anticipated at 1.14529 (161 %). The second price target can be predicted at 1.16200 (261.8%) and the third and final target may be expected at 1.18904 (423.6%).
If the support level at 1.11826 is broken, the possible scenario is invalid and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the EUR/USD currency pair on the D1 time frame will remain bullish.
A closer look revealed that the Momentum Oscillator displayed positive divergence between point a and b compared to the price at 1.11097 and 1.11069. This could have alerted technical traders to a possible reversal in the making.
After the bottom at 1.11069 the market broke through the 15 and 34 Simple Moving Averages, the Momentum Oscillator sliced through the zero baseline into bullish terrain and the 15 and 34 Simple Moving Averages crossed, forming a so-called Golden Cross. These all confirm the possibility of a technical trend reversal.
A possible critical resistance level formed when a higher top was recorded on the 7th of June at 1.13497. Sellers then temporarily pulled the price lower and a higher bottom was registering on the 18th of June at 1.11826.
If bullish pressure cause the EUR/USD to breaks through the critical resistance level at 1.13497, three possible price targets may be expected from there. Attaching the Fibonacci tool to the top of the possible reversal at 1.13497 and dragging it to the bottom of the pullback at 1.11826, the following targets may be considered. The first target can be anticipated at 1.14529 (161 %). The second price target can be predicted at 1.16200 (261.8%) and the third and final target may be expected at 1.18904 (423.6%).
If the support level at 1.11826 is broken, the possible scenario is invalid and will need to be re-evaluated.
As long as buyers maintain a positive sentiment and demand overcomes supply, the outlook for the EUR/USD currency pair on the D1 time frame will remain bullish.