- EUR/USD's rally has been met with strong opposition from the bears.
- EUR/USD bulls have not thrown in the towel yet and eye 1.0700.
As per the prior analysis, EUR/USD Price Analysis: Bulls on the sidelines in anticipation of a discount, the more composed bulls, tolerant of the initial runaway train who waited for a discount were paid off nicely with the pair rallying from lows of 1.0580 to a high of 1.0645 between London and ahead of the cash open on Wall Street.
EUR/USD prior analysis
It was stated that EUR/USD could be an attractive play for the bulls if enough of a discount was awarded from what would have been regarded as counter-trendline support as illustrated above. It was explained that Asian shorts could set up the day for London traders as a buy-low opportunity.
EUR/USD update
As shown, the bulls did indeed get a discount from the Asian sell-off into London's buyers.
It was explained in the prior analysis that while the bias is to the downside, as per the longer-term outlook, there were prospects of a correction into the bearish trend:
I was explained that ''this might only be premature in the correction and this could offer a buy-low opportunity for bulls in the coming sessions in anticipation of a test of the trendline resistance.''
That is what we got as shown in the daily chart above. However, there are still prospects of a firmer test and a move higher for the day ahead given how short the market is and the following illustrates such a scenario across the daily and hourly time frames:
The strong bull candle has a lot of commitment in there and despite the sell-off in the US session, bulls may remain committed still which offers prospects of another test higher as per the following hourly chart:
Bulls could be seen to emerge from a number of sweet spots on the chart as illustrated.
However, 1.0620/50 could be a tough nut to crack and this might take a number of sessions to break down. 1.0580 will be key in this regard should the bears continue to push back.
1.07 is eyed as a key target for the days ahead.
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