Yesterday, the EUR/USD pair managed to consolidate above the SAM of 21 on 1H charts, trading above 8/8 of Murray. it is now facing a strong resistance level at 1.2249.
Following the aggressive statement from the FOMC on Wednesday, risk appetite is making it difficult for USDX to continue to edge higher. The sharp drop in the US Treasury yields are putting additional weight and holding strong downward pressure to USDX.
The US dollar index (USDX) has strong support in the 89.50 area at this time of writing. It is trading at 89.71 even showing downward pressure. It could find a rebound in this area, which explains the way ahead for the euro to find resistance at the 1.2250 zone.
The technical rebound that the USDX has left, could give a downward correction to the EUR/USD pair and trade below 1.2207, a level of strong support. On the chart, you can see an uptrend channel of the EUR/USD pair, which converges with the SMA of 21.
A technical bounce in the 21-day SMA above the uptrend channel and above 8/8 Murray could give further bullish momentum to break the 1.2249 resistance and reach +1/8 Murray around 1.2268.
The key level of 1.2207 represents the support and bullish outlook in the short term for the EUR/USD pair. A break and consolidation below this zone will be a good opportunity to sell with targets at the 200 EMA around 1.2146.
The technical reading of the eagle indicator is showing a bearish signal. The moving line shows negative divergence. In the coming days, there may be a bearish movement for the EUR/USD pair.
Our recommendation is to sell below 1.2249 or if it falls below 1.2207 with targets at 1.2146 (EMA 200).
Support and Resistance Levels for May 21 – 24, 2021
Resistance (3) 1.2269
Resistance (2) 1.2255
Resistance (1) 1.2246
----------------------------
Support (1) 1.2207
Support (2) 1.2183
Support (3) 1.2152
***********************************************************
Trading tip for EUR/USD for May 21 - 24, 2021
Sell if pullback 1.2249 (Strong resistance), with take profit at 1.2207 (8/8), stop loss above 1.2285.
Buy if rebound 1.2207 (8/8 of murray), with take profit at 1.2249 and 1.2263 (+1/8), stop loss below 1.2175.
The material has been provided by InstaForex Company - www.instaforex.com