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EUR/USD Breaks Above Converging Lines

EUR/USD rallied from 1.3513 to 1.3643 last week, and fell back to 1.3564 to start this week. Although the 1H RSI shows lack of bullish momentum, price action since last week is creating higher lows. After trading between converging lines, EUR/USD was able to break above the falling line, giving us a bullish signal in the 6/24 European session.


(eurusd 1h chart, 6/24)

As the EUR/USD approaches 1.3630, there is another falling trendline that is seen more clearly in the 4H chart. We can anticipate a near-term pullback from there especially if the 1H RSI gets above 70. If the retracement happens, let's see how the market treats the 1.36 handle and the rising trendline from last week. A break below these support factors refocuses price toward the 1.3476-1.35 area. 


(eurusd 4h chart, 6/24)

A hold above 1.36 can give EUR/USD-bulls more confidence in buying towards the June high at 1.3675. We can see that the mode in the 4H chart is consolidation, following a bearish trend. Therefore, the bullish signal in the 1H chart should have a limited outlook. A clear break above 1.3675 and possibly 1.37 will be needed to introduce any bullish outlook outside of this next couple of sessions.