EURUSD has gathered bullish momentum and climbed above 1.0400 for the first time since July. The upbeat ZEW sentiment data for Germany and the euro area help the Euro (EUR) find demand while the US Dollar stays on the back foot amid improving market mood.
EURUSD continues to trade within the ascending regression channel coming from early November after having met support at the lower limit of that channel on Monday. The Relative Strength Index (RSI) indicator on the four-hour chart, however, is back above 70, suggesting that there could be another downward correction before the pair could target new multi-month highs.
On the upside, 1.0460 (static level from July, upper limit of the ascending channel) aligns as the first resistance. If EURUSD rises above that level and confirms it as support, it could target 1.0500 (psychological level, static level) next.
1.0400 (psychological level, mid-point of the ascending channel) forms interim support before 1.0350 (lower limit of the ascending channel) and 1.0300 (psychological level, 20-period Simple Moving Average (SMA)).
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