- Risk-perceived assets have regained their mojo as market mood has turned cheerful.
- Oversold momentum indicators in a higher lows structure offer smart money channelization opportunity.
- The RSI (14) has rebounded after dropping below 30.00.
The EURUSD pair has delivered a firmer reversal after sensing a decent buying interest of around 0.9743 in the Tokyo session. The asset has extended its rebound move and is aiming to recapture the immediate hurdle of 0.9800 as the risk-on impulse has regained traction.
The mighty US dollar index (DXY) has refreshed its day’s low below 112.50 as anxiety ahead of the US Nonfarm Payrolls (NFP) has aired. Meanwhile, the 10-year US Treasury yields have slipped to near 4.14%.
On a four-hour scale, the major has rebounded after testing the upward-sloping trendline placed from September low at 0.9536. However, the asset is being offered below the 20-and 200-period Exponential Moving Averages (EMAs), which indicates that the trend is still bearish. Moving Averages are lagging indicators, therefore cannot tag a reversal as a buying opportunity.
While the Relative Strength Index (RSI) (14) rebounded after dropping to near 27.65 as the momentum oscillators triggered oversold signals.
The conjunction of higher-low structure and oversold momentum oscillators are hinting that smart money will be poured into the Euro.
Going forward, a break above the immediate hurdle of 0.9800 will send the asset towards October 23 high at 0.9900, followed by the parity.
On the flip side, the Euro could lose strength if it drops below October 21 low at 0.9705. This will drag the asset towards October 13 low and September low at 0.9632 and 0.9536 respectively.
EURUSD four-hour chart
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