**EUR/USD Hits New Daily Highs: A Technical Analysis Overview**
*Original article by Greg Michalowski, InvestingLive.com*
The EUR/USD pair made notable gains during the trading session on May 7, 2021, establishing new daily highs by pushing through technical resistance levels. Analyzing the trends in this pair reveals a pattern of bullish momentum, driven by both fundamental and technical factors. This detailed breakdown expands on the original analysis provided by Greg Michalowski, taking a deeper look at the technical indicators that supported the upward movement in the EUR/USD currency pair.
### EUR/USD Price Action: A Detailed Look at Momentum
As of the latest trading session on May 7, 2021, the EUR/USD pair saw renewed buying interest from traders and investors alike. The following key developments were observed:
– The pair traded to new highs for the day, topping the 1.2100 level.
– This uptrend came after the pair had hovered in a narrow trading range earlier in the day.
– Momentum intensified after breaking key resistance levels, suggesting strong bullish sentiment in the market.
The move beyond those resistance points gave traders the confidence necessary to push the pair to further highs, reflecting aggressive buying strength and a strong directional bias favoring the upside.
### Technical Indicators Driving the Rally
The pair’s rise was closely tied to several significant technical levels that helped guide market action. A brief recovery in the dollar earlier in the session faltered, opening the door for the euro to appreciate against its American counterpart. The following technical factors played a central role in enabling this price action:
#### Resistance Turned Support
– The pair moved above the 1.2080-1.2085 area, a prior resistance that had capped gains earlier during the week.
– This level was reinforced by a steeper trendline, which previously acted as a ceiling against higher prices.
– Once breached, the zone became a support level that buyers leaned on during short-term price pullbacks.
#### 100-Hour Moving Average (MA)
– The 100-hour moving average was positioned around 1.2063 during the session.
– After trading below this average earlier, bulls managed to push price action back above it during the European session.
– Closing above this technical MA gave added confirmation of the bullish trend and allowed the market to accelerate higher.
#### Fibonacci Retracement Levels
– Traders regularly make note of Fibonacci retracement levels when evaluating potential support and resistance zones.
– The move from the swing low to swing high from previous weeks plotted resistance near the 1.2100 level.
– Breaking above this level confirmed the buyers’ conviction and renewed interest in pushing toward higher targets around 1.2150.
### Technical Breakout Formation
A concise review of the hourly chart illustrates that the EUR/USD formed a higher low earlier on May 7, indicating that buyers were stepping in sooner. This formation served as a foundation for the bullish breakout, with price consolidating above key short-term averages before driving forward.
– Horizontal resistance zones that held over the past few trading sessions finally gave way, showing fatigue from sellers.
– Once the breakout above 1.2085 occurred, price action surged in a clean upward channel toward the day’s new highs.
– Buyers in the market treated previous resistance areas with great interest, aiding the development of fresh support zones throughout the chart.
### Market Reaction to U.S. Economic Data
One possible fundamental catalyst influencing the EUR/USD price movement was the release of weaker-than-expected U.S. job numbers. According to economic releases:
– U.S. non-farm payroll data came in substantially below expectations, suggesting slower recovery in labor markets.
– The weaker jobs report dampened expectations of early Federal Reserve policy tightening, reducing demand for the dollar.
– As a result, investors shifted to alternative currencies like the euro, fostering broader weakness in the dollar index (DXY).
This disappointing labor data fed into broader market narratives of potential dollar softness, which provided a favorable
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