The end of the year finds EURUSD near 1.13 nearly 900 pips below from where we started back in January 2021. Price has retraced 61.8% of the entire upward move from 2020 lows to 1.2350 2021 high. The decline has stopped at a key Fibonacci retracement level and we anticipate the new year with increased interest.
At 61.8% retracement level we usually see trend reversals. The RSI in the weekly chart is turning higher from oversold levels. Price has stopped the decline right on top of the 61.8% Fibonacci level. There are increased chances that 2022 will find EURUSD is a bullish trend and price move closer towards 1.17 or even higher. Even a move above 1.2350 for 2022 is in the cards specially if a higher low has been formed at recent lows. EURUSD has the potential for a major reversal from current levels and to make new highs towards 1.25-1.30. The first step towards this direction would be for bulls to make a reversal from current levels and start making higher highs and higher lows. Previous support is now resistance, so the 38% Fibonacci retracement at 1.17 is now key resistance. Breaking above it will increase the chances that a new upward move has started. Over the coming weeks we will revisit this bullish scenario according to what new information the price has given to us.
