Euro Remains in Bullish Trend Despite Mild Bearish Correction
The EUR/USD pair has been experiencing a mild bearish correction this week after reaching overbought levels in its rally from late July lows. Despite this, the near-term bullish trend remains intact as the Euro continues to recover from the mid-1.14s.
On Thursday, German data showed that consumers are more optimistic about their income and economic context, which has been fairly supportive for the EUR/USD pair. However, traders remain cautious ahead of the Federal Reserve's Chairman Jerome Powell's speech at Jackson Hole on Friday, awaiting clarity on monetary policy plans.
The technical analysis suggests that as long as the Euro remains above 1.1620, the near-term bias is positive. The daily Relative Strength Index (14) is above 65, and the Moving Average Convergence Divergence (MACD) indicator remains in modest positive values, indicating constructive momentum.
The confluence of the May 29 high at 1.1685 and the 78.2% Fibonacci retracement of the May-June selloff at 1.1692 may prove a tough nut to crack for the EUR/USD pair on its way to early May highs near 1.1790.