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MTrading Team • 2023-01-12

EURUSD portrays bullish trend-widening formation

EURUSD portrays bullish trend-widening formation

EURUSD grinds higher around the seven-month top inside a rising megaphone chart pattern on the daily formation. In addition to the bullish chart pattern, the upbeat RSI and bullish MACD signals also keep buyers hopeful. That said, May 2022’s peak surrounding 1.0786 and 1.0800 are likely immediate targets for the bulls. However, the 78.6% Fibonacci retracement level of the pair’s March-September downside, near 1.0835, could challenge the upside momentum afterward. In a case where the quote remains firmer past 1.0835, the stated megaphone’s top line, close to 1.0960, should lure the optimists.

On the contrary, the one-month-old descending previous resistance line around 1.0700 restricts the short-term downside of the EURUSD pair. Following that, a pullback towards the aforementioned bullish pattern’s support line, adjacent to 1.0550, will be important to watch for sellers. Should the quote drops below 1.0550, a downward trajectory towards the 50-DMA and the 200-DMA, respectively near 1.0460 and 1.0300, can’t be ruled out. It’s worth noting that the quote’s weakness past 1.0300 could welcome bears with open hands.

To sum up, EURUSD is likely to remain firmer but the road to the north is bumpy and long.

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