EUR/USD Outlook: Acceleration Above The Neckline Generates Initial Reversal Signal

Technical analysis of Forex market

Near-term focus shifts higher as the euro extends recovery in early trading on Tuesday, adding to initial reversal signals (double-bottom on daily cloud base / daily bullish engulfing).

Fresh advance moves above the neckline of daily H&S which capped the action in past four days, sidelining downside risk.

Bulls were fueled by renewed risk appetite, led by surging bitcoin on huge Tesla’s investment into the cryptocurrency.

Pivotal 1.21 resistance zone (20DMA / Fibo 38.2% of 1.2349/1.1952) is in focus, with sustained break here to confirm higher low at 1.1955 and expose key barriers at 1.2158 (daily cloud top) and 1.22 zone (Jan 22 lower top / Fibo 61.8%).

Broken neckline (1.2050) reverted to key support, with near-term bias to stay with bulls while the price action holds above, while return and repeated and close below would soften near-term structure and revive downside risk.

Res: 1.2103, 1.2124, 1.2158, 1.2197.
Sup: 1.2065, 1.2046, 1.2019, 1.2000.