EURUSD skyrocketed to sixteen-month highs in the wake of the US CPI data on Wednesday, experiencing one of its best daily performances this year.
The pair inched up to a new high of 1.1147 early on Thursday, raising speculation that the bullish wave might have more room for improvement. That said, some caution might be necessary as the price is trading around the tentative resistance line from February at 1.1145 and slightly below the 1.1185-1.1220 constraining zone, which had been limiting both upside and downside movements during November 2021-March 2022. Note that the RSI and the stochastic oscillator have entered the overbought territory and are testing former resistance levels.
In the event the bulls pierce through the 1.1185-1.1220 wall, the next obstacle could develop around the 1.1365 barrier taken from the November 2021-February 2022 trading range. Another victory there could see an extension towards the January-February 2022 highs registered around 1.1480.
Should sellers press the price back below the 1.1100 psychological mark, the focus will turn to the 1.1025-1.1000 area. A step lower could then find immediate support around the 20-day exponential moving average (EMA), which is approaching the 1.0970 barrier. If downside forces further strengthen from there, the door will open for the 50-day EMA at 1.0890.
Summing up, EURUSD resumed a bullish outlook in the big picture following Wednesday’s exciting rally. The next challenge could occur within the 1.1145-1.1220 region.