- EUR/USD extends its rally above 1.0950, up 0.18% on the day.
- The pair is holding above the 50- and 100-hour EMAs with an overbought RSI condition.
- The first upside barrier is seen at 1.0978; the 1.0895-1.0900 zone acts as an initial support level for the pair.
EUR/USD pair is trading in positive territory for the fourth day in a row at the start of the European session on Tuesday. A weaker US dollar and lower US Treasury yields provide some support to the EUR/USD. Investors will take further cues from Tuesday’s Federal Open Market Committee (FOMC) meeting minutes, which could potentially provide insight into the trajectory of future monetary policy rates.
By four o’clock diagramEUR/USD’s bullish potential remains intact as the major pair is holding above the 50- and 100-hour exponential moving averages (EMA). It is worth noting that the Relative Strength Index (RSI) is holding in bullish territory above 50. However, the RSI’s overbought condition suggests that further consolidation cannot be ruled out before positioning for any short-term EUR/USD strengthening.
That being said, an immediate resistance level for EUR/USD is seen near the top of the Bollinger Band at 1.0978. A critical upside barrier is located near the psychological round number and the August 11 high at 1.1000. Any subsequent buying will see a rally to the August 4 high of 1.1042 and on the way to the July 27 high of 1.1149.
On the other hand, the 1.0895-1.0900 region acts as an initial support level for the major pair. The mentioned level is the confluence of the psychological mark and the November 16 high. Further south, another level of contention appears near the lower boundary of the Bollinger band at 1.0817. A break below the latter will lead to a drop to the 50-hour EMA at 1.0759, followed by the November 9 high at 1.0725.