EUR/USD: testing intraday resistance
- Ichimoku Cloud bearish;
- ADX and DI bullish;
- RSI bullish.
Although the Ichimoku Cloud indicator is still bearish, the EUR/USD currency pair shows an impressive performance pretending to chart a bullish reversal pattern. Short-term and thus more sensitive indicators have already switched the sentiment to bullish on the four hour timeframe (see the chart setup below). The ADX and DI indicator has the green line well above the red one, however, themainline struggles to get out of the negative zone, signaling a weak momentum. The RSI oscillator keeps printing fresh highs in the bullish zone above the 50% level.
To continue the recovery, Euro bulls have to lift the exchange rate above the upper band of the Ichimoku Cloud so that both Conversion and Base lines will enter into the span, following the price. Besides, the rate has to breach the previous peak at 1.06014 dollars per Euro (25 pips left). We expect EUR/USD to strengthen towards 1.06500 shortly.
R1: 1.06014 (recent peak);
R2: 1.06500 (round-figure extension);
S1: 1.05370 (Ichimoku Conversion line);
S2: 1.04804 (Ichimoku Base line).