EUR/USD Forecast: Bulls Target $1.06400
2022.05.22 08:26
In our previous forecast, we anticipated EUR/USD retracing to $1.04700, which occurred—and pretty quickly at that, taking only two days to reach that level.
On Tuesday, the price made a strong bullish candle reaching high levels inside the previous range area. After that, the pair retraced back down to $1.04600 and from there a strong bullish engulfing candle broke through the previous range and closed the day above a previous candles body within the range area.
This was a strong sign of bull’s strength which is an indication of the future move.
On Friday, we had a small retrace where traders exited trades, taking profits created by the strong move upwards.
EUR/USD Daily Chart
With strong bullish candles, and breaks of some critical levels to the upside, we can see the price moving up.
The retrace on Friday was a nice move that took the price to the first support area, a demand zone around $1.05087. And since the candle close was above previous candle body highs, which is a good signal, we expect the price to trend to higher levels.
From here we can expect the price to reach close to $1.06400, a level that is higher than the previous bullish attempt. But, the downtrend channel resistance line is preventing the price from reaching higher levels. Plus, we also have a confluence of resistance above the channel resistance line that will be problematic for the price.
On the downside, we’ll need the pair to move back below $1.05000 in order for us to continue looking for lower levels. Until that happens, we need to wait for the price to move outside of its previous range area.
