The upward movement of the price of the EUR/USD pair resumed yesterday, as a result of which the local high (1.1830) on October 9 was broken. Moreover, the euro got another chance to recover from the September decline – 1.2011 ---> 1.1612.
Here, several technical factors acted as trading signals of upward development. I suggest you consider the following:
1. The lack of price consolidation below the support level of 1.1700 and the local high of 1.1610, betrays buyers' confidence.
2. A price consolidation above the range level of 1.1810, which coincided with the local high (1.1830) on October 9, gives buyers confidence.
In regards with the quote's current location, you can see that the quote updated yesterday's high of 1.1840 during the Asian session, which favors long positions (buy positions).
The only thing that worries many traders is that we have had an almost vertical price movement since this week began. This can lead to overbought and a technical correction (1.1700 ----> 1.1850).
Based on the quote's location and the upward movement, we can consider trading forecasts from a number of possible market scenarios.
First scenario: Buyers' continuation of growth
Consistent growth can lead the quote to the area of 1.1870/1.1900, where there is a sharp stop and a volume reduction. But this scenario may affect the euro's price in terms of its weakening.
Second scenario: Overbought as a result
It was noted above that a rapid increase can lead to a technical pullback/correction, in this case, in the direction of the previously overcome level 1.1810.
