The euro has begun the trading week extended gains but currently testing resistance at 1.1207.
As the pair rejected the resistance at 1.1320 levels in the recent past, began tumbling from there.
So, even if the current upswings extend we could see the restrained upside targets of 50-60 pips from current levels (1.1257 or 21DMA or maximum upto 1.1320 levels).
(14) on converging to the rallies (Currently, daily trending above 46 levels).
But on contrary, if it doesn't hold onto the above mentioned resistance then most likely to show more slumps that exposes more targets.
By that time, the overbought environment would result in the selling momentum when prices touched 1.1320 by taking the computation of last 14 day periods the magnitude of recent gains to recent losses in an attempt to signifying the overbought pressures.
While %K crossover on daily on slow curve along with every price spike signals momentum in minor buying interest (Currently, %K line trending below 44, while %D line below 28).
We urge that long term investors should be cautious on such ongoing deceptive bull swings, even if it holds the current levels, we see restricted upside potential upto 1.1320 and major resistance at around 1.1461 levels, at this juncture momentum in previous rallies likely to collapse, long term downtrend seems intact.
You can easily observe the price behaviour of this pair drifting through sideway range for more than a year or so.
We think the pair is still largely , if it doesn't manage to hold onto the current level, then the next strong support can be seen at 1.1104 or drag upto 1.1080 levels in medium terms.
Hence, in long run we still project below a cyclical lows 1.10 by H2'2016 end.