EURUSD has reached our short-term cloud target after the bullish signals we mentioned and since price broke the key resistance levels of the tenkan-sen and kijun-sen indicators. Short-term trend is about to change if bulls continue this upward move next week.
In our previous analysis the past week we said that if price were to break above the tenkan-sen(yellow line indicator) it would move towards the kijun-sen (green line indicator) and could even reach the Kumo (cloud) resistance. Our target are was 1.10-1.1050. On Friday price made a high at 1.1018. Additionally we noted a bullish inverted Head and Shoulders pattern if price were to break above 1.0890-1.09. So far this pattern is still valid and we continue to target 1.1050.
We are very likely to move towards 1.11 as long as price is above 1.09. Bulls need to keep price above 1.09 and bears need to break back below it once again. If price continues to make higher highs and higher lows then we could see it break above 1.11. So far the sequence of lower lows and lower highs has been stopped since Friday's new higher high. The formation I see now starts to feel more like a bottoming process. The low at 1.0727 although it briefly breached below the April 6 low, it turned swiftly upwards providing a higher high. This is clearly bullish. Next week is crucial, as it 1.09.
