- EUR/USD extends its high above 1.0950, up 0.18% for the day.
- The pair is holding above the 50 and 100 hour EMA and the RSI is overbought.
- The first upper barrier is seen at 1.0978; the 1.0895–1.0900 zone acts as the initial support level for the pair.
The EUR/USD pair is trading in positive territory for the fourth straight day during the early European session on Tuesday. Weaker US Dollar yields and lower US Treasuries provide support for EUR/USD. Investors will take further cues from the Federal Open Market Committee (FOMC) Meeting Minutes on Tuesday, which could provide insight into the direction of future policy rates.
According to the four-hour chart, bullish potential for EUR/USD remains as the major pair is breaking above the 50- and 100-hour Major Moving Averages (EMA). It is worth noting that the Relative Strength Index (RSI) is holding a trading area above 50. However, the overbought RSI condition indicates that further consolidation cannot be ruled out before any close EUR/USD value is placed.
That being said, an immediate resistance level for EUR/USD is seen near the upper boundary of the Bollinger Band at 1.0978. An important upper limit is close to the psychological round figure and the top of August 11 at 1.1000. Any subsequent buying will see the August 4 high at 1.1042 rally, heading towards the July 27 high at 1.1149.
On the downside, the 1.0895–1.0900 zone acts as an initial support level for the major pair. The mentioned level is the connection of the psychological level with the high of November 16. Further south, the next level of conflict will occur near the lower limit of the Bollinger Band at 1.0817. A break below the latter will see a drop to the 50-hour EMA at 1.0759, followed by the November 9 high at 1.0725.
EUR/USD four hour chart