EUR/USD Price Analysis: 0.9780/0.9820 support to play role for run to test above prior week's highs
- EUR/USD bulls eye last week's high as an imminent target.
- The bears will be looking for a peak in this daily correction.
EUR/USD is within a broadening formation in a softer US dollar environment at the start of the week. The pair is attempting to move higher with last week's highs near 0.9850 in focus, 100 pips above this week's low so far. A break of the prior week's highs will open the risk of a move to test 0.9900 with 0.9950 resistance on the cards thereafter. On the flip side, 0.9750 guards a run to 0.9650:
EUR/USD H1 chart
EUR/USD daily chart
The price has corrected a significant portion of the prior bearish impulse on the daily chart and is targeting the neckline of the M-formation as illustrated above. This has a confluence with the 61.8% golden ratio near 0.9850. Resistance guards a leg higher to 0.9950 and around a 78.6% Fibo. Should the US dollar and yields eventually firm, perhaps on a blockbuster job report at the end of the week, then the volumes of orders left behind any potential grind higher could be bate for the bears as illustrated on the chart above.
DXY H1 chart
The US dollar, as measured by the DXY index vs. a basket of currencies is under pressure within a key area that otherwise guards against a full-blown sell-off below 111.50. The harmonic pattern is bullish, but the bulls must commit in the coming sessions.
US 10-yr yield
The US 10-year yield is also under pressure while below over head resistance around a 61.8% retracement area near 3.700%.