- EURUSD fights for a bullish reversal above 1.0600
- Upward moves may face choppy conditions
EURUSD has started to show some signs of life. The pair seems to have formed an inverse head and shoulders pattern around a two-year low of 1.0330 in the four-hour chart, sparking speculation that a positive turnaround could be around the corner.
The soft upturn in the 20- and 50-period simple moving averages (SMAs) are endorsing the encouraging trend signals. However, for the latest rebound to gain real traction, a sustainable close above the neckline at 1.0590-1.0600 is needed.
That said, the way higher may not be entirely smooth, with new obstacles likely emerging around the 200-period SMA at 1.0655 and then near the tentative resistance line at 1.0700. Even higher, the pair could face another wall somewhere between the 50% Fibonacci of the September-November downleg and the 1.0800 number.
On the flip side, if the pair slides below the 23.6% Fibonacci retracement at 1.0540—where the 20- and 50-period SMAs are converging—immediate support could be found around the 1.0500 level. A failure to hold at this point could open the door to further losses, potentially targeting the 1.0460 area or even the 1.0380-1.0400 zone.
In brief, EURUSD is poised for an upside reversal, with the 1.0600 level acting as a crucial confirmation point. However, a potential bullish trend may not take shape unless the pair breaks decisively above 1.0700.
