EURUSD prices have accelerated higher with the broader USD decline, breaching the 1.1495 March highs, but we still see strong resistance around 1.1600. As such, we remain wary that the broader USD has reached its medium-term range supports, so caution is warranted.
Technically, the bulls shrugged-off shooting star pattern (refer daily chart), but the minor uptrend may be exhausted on overbought pressures signalled by the stochastic curves, more rallies likely with minor dips are possible as both leading & lagging oscillators are in tandem with the uptrend. A decline back through 1.1450-1.1400 would be the first sign that a turn back within the range is being seen.
On a broader perspective, the rally from 1.0635 is approaching an important juncture around 1.15-1.16. This is still expected to define the top of a medium-term range.
Bulls shrugged-off shooting stars on this timeframe as well. Currently, the major trend is on the verge of 2-year highs, while the consolidation phase in major downtrend retraces more than 50% Fibonacci levels, while both leading & lagging oscillators are also substantiating bullish bias.
However, a clear break of this region would suggest potential for a return to the 1.20-1.25 region again.
Trade tips: At spot reference: 1.1583 levels (while articulating), contemplating above technical rationale, one can execute boundary options strategy. Such exotic option with upper strikes at 1.1750 and lower strikes at 1.1525 levels likely to fetch exponential yields than the spot moves.
Alternatively, we recommend long hedges of August tenors as we could foresee further upside risks in the days to come while the pandemic and macroeconomic turmoil remain intact.
