EURUSD as expected has back tested the cloud support at 1.1735 and bounced, exactly as bulls wanted. Price has made a new higher high after the bounce and is now challenging the horizontal resistance level at 1.18.
EURUSD is trading above the Ichimoku cloud. Price is above the tenkan-sen (red line indicator) and the kiju-sen (yellow line indicator). Support by these two indicators is at 1.1768-1.1777 in the 4 hour time frame. As long as price is above this support area we remain optimistic for a bigger bounce higher towards 1.19. Price has started making higher highs and higher lows and this bounce is also technically justified because of the RSI bullish divergence.
Red lines - bullish divergence
Blue lines - Fibonacci retracement
Our first bounce target is the 38% Fibonacci retracement at 1.19. We remain optimistic that a low is in and we are now entering a bullish phase for EURUSD.
