EUR/USD saw a strong rally last week, reaching a high of 1.0910. The current bias is still leaning towards the upside for the coming week. If there is a decisive break above 1.0915, we could see a continuation of the upward movement from 1.0601 to a 100% projection level of 1.0915 from 1.0665, reaching as high as 1.0979. However, if the price falls below 1.0859, the short-term bias could shift to a neutral stance.
Looking at the bigger picture, the price action from 1.1274 is considered a corrective pattern, possibly forming a triangle that is still in progress. If there is a breakthrough above the resistance level of 1.1138, it could signal that the upward movement from the 2022 low of 0.9534 is ready to continue towards the 2023 high of 1.1274. This scenario is likely to be the most favored as long as the support level of 1.0601 remains intact.
From a long-term perspective, it is believed that a bottom has been established at 0.9534, the 2022 low. A sustained break above the 55-month Exponential Moving Average (currently at 1.1046) would increase the likelihood of a long-term reversal. However, even in this scenario, a clear breakthrough of the structural resistance level at 1.2348 would be required to confirm the reversal. If the price is rejected at the 55-month EMA, it could maintain a bearish outlook and potentially lead to an extension of the downtrend from the 2008 high of 1.6039 through the 2022 low of 0.9534 at a later stage.
It is essential for traders and investors to closely monitor these key levels and developments in order to make informed decisions regarding their positions in the EUR/USD pair. The current market conditions suggest a continuation of the bullish momentum, but potential reversals should not be ruled out, especially if critical support and resistance levels are breached. Stay tuned for further updates on the EUR/USD pair as the market dynamics evolve.