EUR/USD extends rally towards 1.08500 ahead of FOMC decision
EUR/USD Technical Analysis
The H4 Chart of the currency pair EUR/USD shows that prices have extended the rally after moving up the 200-period Simple Moving Average line. Since it abandoned the descending channel, it has started making a Higher High pattern. Furthermore, the 50-SMA line is about to cut the 200-SMA line from below, giving an indication of strong bullish pressure. Given this bullish pattern follow-up, the currency pair is poised to see its first resistance at the 1.08056 level.
The Moving Average Convergence & Divergence histograms are making strong bars above the zero line, suggesting further price up ahead. Meanwhile, the Relative Strength Index near the 70 level also shows that there is some more room left for the upside. However, the Stochastic Oscillator has already reached the overbought zone and giving signs of a possible reversal.
If the forex pair EUR/USD breaks above the critical resistance at 1.08056, it would extend its rally to the upside towards the 1.08500 level. From there, it could see the next resistance at the psychological 1.09000 level. On the other hand, if prices fail to break above the critical resistance level, the pair might see a possible correction here. The first support is near the 200-Period SMA at 1.06820. Any break below this level would further drag the prices towards the 100-Period SMA below the 1.06400 level.
Overall, the technical analysis of EUR/USD shows signs of further bullish pressure with a target of 1.08500. The idea is to wait for the price to break above the critical resistance before opening a long position. If prices face rejection at this point, it will give an opportunity for a short position.
Daily Technical Levels
Pivot Point: 1.0694