FX.co ★ Technical Analysis of EUR/USD for May 06, 2021

The EUR/USD pair is trading a few pips above the 38.6% retracement of its latest bullish run after repeatedly meeting buyers on approaches to the 50% retracement of the same rally. The near-term picture offers a mildly bullish stance, as, in the 1-hour chart, technical indicators are entering positive territory. In the same time-frame, the pair is developing above all of its moving averages, with the 100 EMA losing its bearish strength. The pair could accelerate its advance once above 1.2045, the weekly high.

The EUR/USD pair broke resistance which turned to strong support at the level of 1.2025 last week. The level of 1.2025 is expected to act as major support today.

From this point, we expect the EUR/USD pair to continue moving in a bullish trend from the support levels of 1.2025 and 1.2114.

Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Consequently, the first support is set at the level of 1.2025 (horizontal green line).

So, the market is likely to show signs of a bullish trend around the spot of 1.2005/1.1986. In other words, buy orders are recommended above the spot of 1.2005/1.1986 with the first target at the level of 1.2088; and continue towards 1.2414 (the weekly resistance 1).

This would suggest a bearish market because the moving average (100) is still in a positive area and does not show any trend-reversal signs at the moment.

On the other hand, if the EUR/USD pair fails to break through the resistance level of 1.2114 this week, the market will decline further to 1.2049.

The pair is expected to drop lower towards at least 1.2025 with a view to test the weekly pivot point. Also, it should be noted that the weekly pivot point will act as minor support today.