Richard Perry
Independent Analyst
EUR/USD
There have been early signs of exhaustion in the rally, but the EUR/USD bulls keep on powering through for now. It is difficult to see the dollar regaining much ground whilst Treasury yields continue to plunge new depths. EUR/USD is back to a key barrier, with the resistance around $1.1240 being tested. An incredible move considering just two weeks ago the market was deeply bearishly configured around the multi-year low of $1.0775. A tick back from an early session high of $1.1248 has been seen today with the RSI again over 70. As we found out in mid-February, the traditional limits to the RSI on EUR/USD (between 30 and 70) are being stretched and should not necessarily be seen as limits at all. Subsequently, a closing breakout above $1.1240 today could open the next phase of buying towards $1.1410. The hourly chart shows initial support at $1.1185/$1.1210 (recent old highs), which will gauge the strength today. Hourly MACD turning over give a sense that the market is paying attention to $1.1240, so care does need to be taken with reversal signals. However, until $1.1095 is broken there would not be any real confirmed corrective signal.
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