The EURUSD currency pair has made a bullish technical break by surging above the 1.0670 resistance level. This move suggests that the short-term downtrend from the 1.0884 high may have already found a bottom around the 1.0600 low.
With the breakout above 1.0670, the current rebound off the 1.0600 low could now be seen as a corrective move within the broader downtrend stemming from the 1.0981 peak set earlier this year.
If this corrective bounce continues to gather steam, further EURUSD gains could potentially be expected over the coming days. The next key target on the topside is the 1.0760 resistance area. A move beyond 1.0760 would then have the falling trendline visible on the 4-hour chart timeframe in focus as potential further resistance.
In the near-term, the 1.0600 level now represents the first meaningful support. As long as EURUSD holds above that level, the bias appears tilted in favor of the bulls targeting a continuation towards 1.0760 and potentially higher.
However, only a break back below 1.0600 support would raise concerns of another bearish leg lower, with the 1.0550 area being the next target on the downside in that scenario.
EURUSD traders will want to keep a close eye on the currency pair’s behavior around the 1.0760 resistance zone in the coming sessions. The ability (or inability) to push through that level could go a long way in determining whether the corrective bounce has further room to run or if sellers will regain control.
For now, the path of least resistance seems to be shifting in favor of the bulls, unless EURUSD loses the 1.0600 support area again. The technical breakout above 1.0670 has opened the door for a potential larger recovery from the recent lows.