EUR/USD Rebounds Ahead of Weekly Low to Keep RSI in Overbought Zone
EUR/USD may break out of the range bound price action as it bounces back ahead of the weekly low (1.0805) to keep the RSI above 70.
Written by
David Song
Strategist
Euro Outlook: EUR/USD
EUR/USD consolidates after clearing the November high (1.0937), but the range bound price action in the exchange rate may turn out to be temporary as the Relative Strength Index (RSI) clings to overbought territory.
EUR/USD Rebounds Ahead of Weekly Low to Keep RSI in Overbought Zone
EUR/USD appears to be stuck in a narrow range as US President Donald Trump warns of increasing tariffs for the European Union, and the transition in US trade policy may lead to further volatility in foreign exchange markets as it raises the threat of a trade war.
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With that said, EUR/USD may break out of the range bound price action as it bounces back ahead of the weekly low (1.0805) to keep the RSI above 70, but the oscillator may show the bullish momentum abating if it falls back from overbought territory to indicate a textbook sell-signal.
EUR/USD Chart – Daily
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
- EUR/USD trades in a narrow range after registering a fresh yearly high (1.0947) earlier this week, but the exchange rate may extend the advance from the start of the month as it continues to close above the 1.0830 (23.6% Fibonacci extension) to 1.0880 (23.6% Fibonacci extension) region.
- Need a close above 1.0940 (50% Fibonacci retracement) to bring the 1.1070 (23.6% Fibonacci retracement) to 1.1090 (38.2% Fibonacci extension) zone on the radar, with the next area of interest coming in around the October high (1.1144).
- At the same time, a close below the 1.0830 (23.6% Fibonacci extension) to 1.0880 (23.6% Fibonacci extension) region may push EUR/USD towards 1.0760 (38.2% Fibonacci extension), with the next region of interest coming in around 1.0660 (61.8% Fibonacci extension) to 1.0710 (50% Fibonacci extension).
Additional Market Outlooks
USD/JPY Rebound in Focus with BoJ Expected to Hold Interest Rate
Gold Record High Price Pushes RSI Towards Overbought Zone
British Pound Forecast: GBP/USD Pulls Back Ahead of November High
Canadian Dollar Forecast: USD/CAD Faces BoC Rate Cut as Trump Tariffs Loom
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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