Euro bulls have been charging again in the past few days, but there could be a chance to catch a short-term pullback on these pairs. Take a look!
EUR/USD recently surged past the 1.1000 major psychological barrier, indicating yet another pickup in bullish momentum. Buyers might need more help sustaining the climb, though, so a pullback appears to be taking place.
Applying the handy-dandy Fib tool on the latest swing low and high shows that the 61.8% retracement level lines up with a rising trend line connecting the lows since mid-April and the 200 SMA dynamic support. The 50% Fib is right smack in the middle of an area of interest while the 38.2% level coincides with the 100 SMA.
The gap between the moving averages is getting wider to reflect strengthening buying pressure while stochastic is pulling up from the oversold area. These might be enough to take EUR/USD back up to the swing high and beyond after the correction is completed.
EUR/GBP is also in the middle of a correction and it already appears to have bounced off the nearest Fib. But until price forms new highs past the latest one around .8615, another pullback might still be in the works.
The 100 SMA is above the longer-term 200 SMA on the 1-hour chart, confirming that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. Stochastic is on its way up to show that buyers are in control of the game.
If sellers regain the upper hand, a deeper retracement to the 50% Fib or the .8500 major psychological level is a possibility. This is within a former resistance zone where a lot of buying interest might be located for now.