EUR/USD: Bulls Maintain Control for Continued Gains; Shallow Correction Expected Before New Upsurge

EUR/USD reached a new 2024 high of 1.1088 on Tuesday, but signs of fatigue are emerging among bulls following a strong rally over the past two days.

Fundamentals remain supportive, with the Eurozone’s trade surplus widening significantly in June and inflation staying elevated in July, suggesting potential for further gains after a correction.

While bullish daily indicators support a positive outlook, overbought conditions and waning momentum from recent highs indicate that the rally might be losing strength.

Any pullbacks should ideally find support around the 1.1000/1.0985 zone (the broken psychological barrier now acting as support and the daily Tenkan-sen) to maintain the bullish trend and enable further movement through 1.1105 (55-day moving average), targeting 1.1139 (December 2023 high), with further resistance at 1.1220 (100-day moving average) and 1.1275 (2023 high).

A close above the recently broken 200-week moving average (1.1063) would provide a fresh bullish signal.

Res: 1.1088; 1.1105; 1.1139; 1.1220
Sup: 1.1063; 1.1021; 1.1000; 1.0985