EUR/USD: bullish reversal
- Williams Alligator bullish;
- MACD bullish;
- Awesome Oscillator bullish.
The EUR/USD currency pair completed a bullish reversal pattern on the four-hour timeframe (see the chart setup below). It’s important that after peaking at 1.06072 on Friday, the pair bounced towards the upper line of the Williams Alligator indicator, and failed to breach it from below, leaving a long donside shadow. This means that the bulls are ready to enter the market using the mean-reversing trading strategy (buying on rebounds). As a result, Williams Alligator’s lines are placed well to proceed with the recovery of the exchange rate.
On top of that, EUR/USD breached the upper band of the latest sideways channel (blue), which points to further appreciation towards the previous bottom at 1.07574. The MACD indicator is bullish, divergences are absent, the lines did not perform a bearish crossover, while the histogram is in the green. The bullish momentum is also reflected on the Awesome Oscillator as the bars kept rising. We expect the pair to keep recovering this week.
R1: 1.07574 (horizontal static line);
R2: 1.09446 (previous peak);
S1: 1.06420 (former resistance);
S2: 1.05588 (WA green line).