EUR/USD ran up to a high of 1.1095 yesterday and had looked poised for a major upside break, as the dollar hit an air pocket in US trading. While the pair did fall back from the highs, it was still a solid day for buyers as they held an attempt to keep above 1.1000 at least.
However, is that enough to vindicate a further run to the topside? Let's take a look at the technicals.
Let's start off by setting the background for price action in the pair over the past two weeks. I've been harping on how the dollar is at the edge for a while now and that was already seen two weeks ago when EUR/USD hit a high of 1.1075 at the time.
But the weekly close then failed to hold above the 2 February high of 1.1033 and more importantly, it also ended being below the pivotal 1.1000 mark.
That being said, buyers can take encouragement from the hold above the 100-week moving average (red line) and the 50.0 Fib retracement level at 1.0942.
Those were two big levels that held on the chart above in trading last week, despite some pressure moments to break through by sellers.
And as we get into trading this week, the dollar is losing momentum in the past few sessions and we are going back to where we were two weeks ago essentially.
As such, it will once again come down to the weekly close for EUR/USD. Can it hold above 1.1000 and clear weekly resistance at 1.1033? I would argue it would be even more preferable to clear the recent highs of 1.1075 as well but at this point, surely buyers will take what they can get and run with it.
There's still a slew of key risk events to come before the end of the week, not to mention month-end trading, and that will make for an exciting next few sessions for EUR/USD. If there is to be a clear break higher, I reckon we'll see a quick run towards 1.1200 next at least.
