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Can EUR/USD Continue its Recovery?

May 23, 2022

  • EUR/USD started an upside correction after testing support near 1.0350.
  • Bearish trend line broken with resistance near 1.0490.

The Euro, US Dollar pair started to recover from below the 1.0400 level. EUR/USD broke above resistance at 1.0500 and continued to climb.

EUR/USD 4-Hour Chart (Trend: BULLISH)

On the 4-hour chart, the EUR/USD pair gained strength after breaking above the 1.0350 level. There was also a break above the key bearish trend line with resistance near 1.0490. The quote even broke above the 1.0520 resistance level, the 100-MA (red), and the 50% Fibonacci retracement level of the downward move from the swing high of 1.0641 to the swing low of 1.0349.

For the pair to continue bullish, the quote will first need to test resistance near the 1.0650 level and the 200-MA (blue). Above this there is further resistance near 1.0720. Further gains could see the quote climb back up towards the 1.0800 level.

In contrast, if the pair turns bearish, the quote will first need to test support near the 1.0500 level. Below this there is further support near 1.0450. Further losses could see the quote decline towards 1.0345, a level last seen in 2017.

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