EURUSD is sailing across the 1.1900 territory, signaling that the rebound off the 3-month low of 1.1834 is something more than temporary.
The strong positive momentum in the RSI and the MACD and the progressing bullish cross between the red Tenkan-sen and Kijun-sen lines reflect growing buying appetite on the four-hour chart.
However, with the fast Stochastics fluctuating well above their 80 overbought mark, some stabilization could still be possible, especially as the 1.1950 restrictive region is within breathing distance. Note that the price is also trying to overcome the 23.6% Fibonacci of the 1.2242 – 1.1835 down leg, which managed to cap bullish actions around 1.1930 over the past couple of days.
If the pair pulls back below 1.1930, the red Tenkan-sen line at 1.1900 and the 20-period simple moving average (SMA) may attempt to limit any declines towards the 1.1875 support region. Below the latter, all eyes will shift to the 1.1834 bottom, where any violation would worsen the bearish outlook.
Alternatively, an extension above 1.1950 could immediately pause near the 50-period SMA at 1.1970. The 38.2% Fibonacci of 1.1990 and the 1.2000 key level, which are positioned around the lower boundary of the Ichimoku cloud, may attract greater attention if the bullish run continues.
Summing up, the short-term risk for EURUSD is looking positive, with traders likely waiting for a close above 1.1950 to increase their buying exposure.
In fundamentals, the ECB policy announcement at 12:45 GMT will be closely watched for any volatility swings ahead.
