**EUR/USD Posts Strong Recovery from 1.1540 Support Level Towards 1.1720: Technical Outlook and Market Context**
*Original article by The Tradable*
The EUR/USD currency pair recently demonstrated a robust rebound from a key technical support level at 1.1540, pushing upward toward the 1.1720 price region. This significant price movement has attracted strong interest from market participants and technical traders alike, indicating that bullish sentiment may be re-entering the market after recent declines. With this shift in momentum, investors are closely watching if bullish continuation will persist through upcoming resistance levels or if the pair might consolidate before resuming a new trend.
The following is a detailed analysis of the EUR/USD rebound, what may have catalyzed the price action, and the technical landscape as the pair attempts to regain upside momentum. This expanded breakdown examines key support and resistance zones, short-term and long-term trends, as well as macroeconomic and geopolitical influences that might support a continuation of the rebound.
### Strong Bounce Off Support Level
– EUR/USD saw a decisive bounce after briefly testing the 1.1540 support level, a historically significant price region.
– The rebound took the currency pair sharply higher toward the 1.1720 resistance mark, suggesting a renewed shift in buying interest.
– The 1.1540 level acted as a psychological and technical floor, with multiple prior touches adding to its relevance.
### Technical Signals Favor a Short-Term Uptrend
Technically, EUR/USD exhibits signs of renewed upside traction based on several key indicators:
– **Relative Strength Index (RSI):** The RSI had previously dipped into oversold territory on the 4-hour and daily charts, suggesting selling was exhausted from a momentum perspective. The recent bounce has helped the RSI recover to more neutral levels, indicating buyers have regained short-term control.
– **Moving Averages:**
– The 50-period moving average is starting to flatten, hinting at a potential reversal in trend.
– The 200-period moving average remains above the current price, serving as a longer-term resistance level and a potential upside target.
– **MACD Indicator:** The MACD histogram has begun to turn positive on the 4-hour chart as the MACD line crosses above the signal line, providing a bullish crossover. This supports the view that the directional bias may have shifted to favor the bulls in the short term.
### Horizontal Resistance at 1.1720
– The rebound is approaching a notable resistance region near 1.1720. This price level has served as both support and resistance in recent trading history.
– If EUR/USD can close above 1.1720 on a daily basis, it could pave the way for further bullish continuation, possibly toward 1.1800 and beyond.
– However, a failure to clear this ceiling convincingly may cause price consolidation or a short-term pullback.
### Key Technical Levels to Watch
Support Levels:
– 1.1540: Recent bounce zone and historical pivot.
– 1.1460: Next downside floor if 1.1540 fails to hold in the future.
Resistance Levels:
– 1.1720: Immediate resistance as EUR/USD consolidates gains.
– 1.1800: Psychological resistance and former support zone.
– 1.1900: Longer-term resistance level aligned to previous high pivots.
### Fib Retracement Insights
– When applying a Fibonacci retracement from the recent high near 1.1900 to the swing low of 1.1540, the 38.2% retracement lies around 1.1675.
– The currency has already surpassed this level, suggesting strength among buyers, with the 50% retracement around 1.1720 now in focus as a key short-term resistance.
– A successful breach could open the way to the 61.8% level at approximately 1.1765.
### Trading Volume and Momentum
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