The EUR/USD currency pair trades around the 1.1800 handle as it looks to continue its recent run higher. During European trading hours on Tuesday, the pair teased this big psychological mark, showing their impressive bullish strength. The Euro technical indicators still strongly point to the fact the Euro is holding its own against the US Dollar. This is occurring despite soaring positive growth data from the US economy.
The down daily chart tells a different story – EUR/USD is in an uptrend. As it stands, it is trading above all its moving averages, validating this bullish momentum. Importantly, the 20-day Simple Moving Average (SMA) lies at 1.1681, adding further confluence to the support zone seen in intra-day/shorter-term charts. The dynamic support is supported by the 20 SMA at 1.1739. This level gives additional support for the positive trend. Moreover, the 100 SMA is located at 1.1692, adding an extra layer of support to EUR/USD’s battlefield.
The Momentum indicator remains solidly above its midline. Lately it has lost that upward momentum, an indication that the buying pressure may be beginning to dwindle. The Relative Strength Index (RSI) now sits at 65, indicating a movement away from the overbought zone. This indicates that bullish sentiment is still prevalent, but some consolidation may be needed before prices can push higher again.
As can be seen on the 4-hour chart, a bullish trend is evident. The 20-period SMA is decisively above the 100- and 200-period SMAs as well. Here’s the catch though—the long format measures are on the rise. At the same time, the 20 SMA is starting to tilt upwards, which seals the bullish spell on EUR/USD. In addition, the upward trajectory of the 20-day SMA above the 100- and 200-day SMAs further underscores a strong bullish bias.
The recent economic performance of the US paired with global economic concerns has set the stage for these movements in the currency pair. The US economy grew at a blistering annualized rate of 4.3% in the three months through September. Together, these trends reflect that the employment sector is finally starting to get back on track, as we enter early December. Further, this trend continues to build confidence in a long-awaited economic rebound.
Even some of America’s scariest economic indicators are actually starting to sound good. Despite this, the EUR/USD stays strong, a clear sign that market participants believe in the strength of the Euro’s resilience. As our experts caution, momentum can be fickle. Still, the big-picture trend is unequivocally in favor of continued EUR/USD upside.