EUR/USD rebounds towards 1.1950 after German and Eurozone Preliminary PMIs beat expectations. The US dollar stalls its recovery amid dovish Fed's Powell. US PMIs and Fedspeak remain in focus.
EUR/USD's upside momentum seems to have met an initial resistance near the 1.1950 area so far this week, all following recent multi-week lows in the mid-1.1800s.
The proximity of the oversold territory could still support some occasional bullish attempts. An inverted head and shoulders (a reversal chart pattern on the hourly chart) signals that EUR/USD is about to make a trend reversal.
Moreover, hourly MACD has diverged in favor of the bulls. MACD histograms has produced higher lows, contradicting lower lows on the price chart. That bullish divergence indicates a potential for a corrective bounce which confirms the chart pattern formation after the breakout of neckline level at 1.9200.
That said, there is a minor hurdle at a previous high at 1.1955 ahead of the more significant barrier awaits. Further north comes in the psychological yardstick at 1.2000 the round figure which coincides with the 161.8% Fibonacci extension level.
