EURUSD broke out and above the Ichimoku cloud resistance in the 4 hour chart. Yesterday price bounced higher towards the cloud resistance as we initially expected. We warned traders that the downside potential was limited and current market conditions justified a bounce higher.
Price is above the 4 hour Kumo (cloud). This is a bullish sign. This is the first reversal sign after the end of March. It is important for bulls to keep price above the Kumo. Support by the cloud is at 1.0870. What was yesterday resistance, it is now support. Last line of defense for bulls is at 1.0843-1.0849. Bulls need to defend this. The tenkan-sen (red line indicator) is also above the kijun-sen (yellow line indicator). This is bullish. The Chikou span (blue line indicator) got rejected at the cloud resistance. A push above 1.09 for the Chikou span would be an added sign of a reversal.
