FX.co ★ Ichimoku cloud indicator analysis of EURUSD for May 6, 2021

EURUSD is bouncing higher from the recent low of 1.20. Short-term trend remains bearish in ichimoku cloud terms but soon we will see a test of it. Price has broken above the tenkan-sen and kijun-sen resistance indicators and is now approaching the Kumo (cloud).

The cloud resistance is at 1.2070. As long as price is below this level, short-term trend remains bearish. Bulls need to break above the cloud in order to change the trend back to bullish. Support by the tenkan-sen (red line indicator) is at 1.2022 and if price breaks below it, we will have a bearish signal and increased chances of seeing prices move lower towards 1.19. Price is now approaching important resistance and it is preferred to be cautious. A rejection by the cloud will be a sign of weakness. Aggressive traders will look to short such a rejection.