- EURUSD built on its recent bullish breakout momentum and rallied beyond 1.1200 handle.
- Slightly overbought conditions warrant some caution for bulls ahead of ECB on Thursday.
- Any meaningful dips might still be seen as a buying opportunity and help limit the slide.
It's Throwback Thursday and time to revisit our EURUSD buy call initiated on May 27th. A bullish breakthrough multi-week-old trading range was reinforced by a sustained move beyond the very important 200-day SMA. The pair subsequently rallied to the highest level since March 16, around mid-1.1200s on Wednesday.
In doing so, the pair took along all the intermediate resistance levels and has also found acceptance above the 61.8% Fibonacci level of the 1.1495-1.0638 downfall. The set-up remains firmly in favour of bullish traders and supports prospects for a further near-term appreciating move.
However, daily RSI (14) has moved past the 70.00 level, which points to slightly overbought conditions and thus, warrants some caution before placing fresh bullish bets. Heading into Thursday's ECB monetary policy decision, traders might be inclined to take some profits off the table.
Meanwhile, any meaningful pullback might still be seen as a buying opportunity. This, in turn, should help limit the downside near the 1.1165 support zone (61.8% Fibo. level).