EUR USD maintains rebound strength

EUR/USD (daily chart shown below) has maintained its recent rebound from long-term lows in the face of a continued pullback in US dollar strength.

Having hit a two-month high of 1.1289 late last week, after having risen sharply from a 1.0500-area low for the preceding two weeks, EUR/USD is currently approaching a re-test of last week’s high.

Mid-March and mid-February saw a rough double-bottoming pattern around the noted 1.0500 support area. This chart pattern occurred after a long and sustained bearish trend from the 1.4000-area high in May of last year down to mid-March’s new 12-year low of 1.0461.

The current rise during the past three weeks has been the most pronounced rebound that the currency pair has seen for the past year.

Now caught between two major support/resistance levels – 1.1100 support to the downside and 1.1400 resistance to the upside – the currency pair is trading at a critical juncture.

Any pronounced breakdown below 1.1100 support could begin to re-assert EUR/USD’s bearish trend, with the next major downside target back down around the 1.0800 level. Any move above 1.1400 to further boost the current rebound should meet major upside resistance around the 1.1640 level.

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