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The EURUSD is getting close to breaking out of a four-month range.
I’ve discussed how the pair needs to clear the range between 1.1615 support and 1.1970 resistance to regain its momentum.
The reason for that is two-fold.
First, the EURUSD has been trending higher since March, and that uptrend is intact despite the recent consolidation.
Second, the euro is holding above a critical long term level near 1.1450.
That 1.1450 area has been the hinge for months now.
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As long as the EURUSD is above it, I like the pair higher.
So, where might the euro go from here?
If buyers can clear the 1.1970 area on a daily closing basis, it would open the door to higher levels, including 1.2150 and 1.2330.
Keep in mind that the 1.1970 area extends as high as 1.2010.
As I’ve mentioned for the last couple of months, my longer-term target for EURUSD remains 1.2500 as we head into 2021.
A daily and weekly close above the 1.1970 to 1.2010 area would help solidify that view.
Disclosure: I hold a EURUSD long position.