EUR/USD Forecast: Bulls Target $1.06400
Frano Grgić | May 21, 2022 12:29AM ET
In our previous forecast, we anticipated EUR/USD retracing to $1.04700, which occurred—and pretty quickly at that, taking only two days to reach that level.
On Tuesday, the price made a strong bullish candle reaching high levels inside the previous range area. After that, the pair retraced back down to $1.04600 and from there a strong bullish engulfing candle broke through the previous range and closed the day above a previous candles body within the range area.
This was a strong sign of bull's strength which is an indication of the future move.
On Friday, we had a small retrace where traders exited trades, taking profits created by the strong move upwards.
With strong bullish candles, and breaks of some critical levels to the upside, we can see the price moving up.
The retrace on Friday was a nice move that took the price to the first support area, a demand zone around $1.05087. And since the candle close was above previous candle body highs, which is a good signal, we expect the price to trend to higher levels.
From here we can expect the price to reach close to $1.06400, a level that is higher than the previous bullish attempt. But, the downtrend channel resistance line is preventing the price from reaching higher levels. Plus, we also have a confluence of resistance above the channel resistance line that will be problematic for the price.
On the downside, we'll need the pair to move back below $1.05000 in order for us to continue looking for lower levels. Until that happens, we need to wait for the price to move outside of its previous range area.
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