EUR/USD has bounced back from a crucial Fibonacci support level at 1.1107 as the US Dollar weakens. However, the pair’s upward movement may be limited due to risk aversion and uncertainty surrounding German inflation and US GDP data.
Technical indicators suggest that the EUR/USD uptrend remains intact as long as the 1.1107 support level holds. The Relative Strength Index (RSI) is above 50, indicating bullish momentum.
To continue the upward trajectory, EUR/USD needs to close above the 1.1150 level to retest the yearly high above 1.1200. On the downside, a break below 1.1107 could lead to a decline towards the 1.1045 level.
Overall, the daily technical setup for EUR/USD looks positive, with potential for further gains if key levels are breached.
Analysis:
The EUR/USD currency pair has bounced back from a key support level, indicating a potential reversal in the near term. However, external factors such as risk aversion and upcoming economic data releases could impact the pair’s movement. Traders should monitor the 1.1107 support level closely, as a break below could signal further downside potential. On the other hand, a close above 1.1150 could pave the way for a retest of the yearly high. Overall, the technical indicators point towards a bullish outlook for EUR/USD, but caution is advised given the current market conditions.