EUR/USD has continued to push higher throughout the day on Thursday and has crossed above the 1.2270 mark in recent trade.
EUR/USD rallies as a result of soft USD conditions.
Multiple factors have been working against US dollar, including:
1) Fed Chair Powell's dovish tone in the post-meeting press conference,
2) A continued pumping of hopes that deals can be reached on further US Covid-19 aid and a Brexit deal, and
3) A cut in US real interest rates driven by an increase in inflation expectations. As a result, the Dollar Index (DXY) has slumped below the 90.00 level for the first time since April 2018.
EUR/USD Rallies Again. What's Next?
From a technical perspective,
According to the daily chart, EUR/USD is rallying again for the 2nd consecutive day. The bulls want the rally to continue up to the February 2018 major high critical level around 1.250 psychological round figure mark.
There is no sign of a top and traders expect upcoming higher prices. But EUR/USD is now at a couple of measured move targets which could attract some profit-taking for a short-term pullback move. The rally is strong and most traders will not sell until they expect EUR/USD to be sideways to up for at least a couple more days.
A bullish continuation pattern ( Bull flag) on the weekly time frame is warning that the EURUSD pair could climb towards the 1.2500 level. The weekly chart shows that a multi-day price close above the 1.2300 level could even cause EUR/USD to rally towards the 1.2500 which coincides with the 100% fibonacci expansion.
The EUR/USD pair's key support is found at the 1.2130 and 1.2090 levels and key resistance is found at the 1.2300, 1.2400, and 1.2500 levels.