The general tendency continues to be northwards; thus, a surge is likely to follow if the Euro surpasses the 55– and 100-hour SMAs at 1.2340. Technical indicators are likewise for this session. A breakout is expected to occur during the second part of the day. The upside target is the weekly R1 at 1.24, while the senior channel is likewise located nearby.
In case the sentiment prevails, the rate should breach the 200-hour and a two-week channel up. As a result, the Euro should be sent towards the weekly S1 at 1.2270.
The Euro gained enough momentum to dash through the 55– and 100-hour SMAs and a short-term channel down early on Monday. The pair surged 63 pips within a couple of hours and halted shortly before the weekly R1 near 1.24.
Taking into account bullish technical indicators, the Euro might continue edging higher for the eighth consecutive session. This surge, however, is likely to be limited by the weekly R1 or the senior channel near 1.24.
Subsequently, the pair should edge lower down to the combined support of the 55– and 100-hour SMAs, the 23.60% Fibonacci retracement and the junior channel near 1.2360.
This session is full of fundamentals from the US which might introduce some volatility in the market and therefore widen the forecasted trading range.
On Tuesday, the common European currency once again failed to overcome the psychological 1.24 mark which has worked as a strong resistance this month.
Being pressured by the weekly R1, the pair reversed from this level and was pushed back down to the 55– and 100-hour SMAs and a junior channel line circa 1.2360. The Euro could go for a re-test of the senior pattern during the first part of the day, as the 55-hour SMA is likely to hinder an immediate breakout south.
However, given the pair’s ability to accelerate during the past trading sessions, the bearish sentiment should eventually take the dominant hand. A significant fall is not expected to occur today due to the 200-hour SMA and the weekly and monthly PPs located nearby in the 1.235/20 area.