Written on 29/11/2021 by Theunis Kruger, FX Trainer at FXTM
The EURUSD market on the H4 time frame had a long-drawn-out down trend until a last lower bottom was reached on 24 November at 1.11853.
A closer look at the Momentum Oscillator reveals a positive divergence between point a and b when comparing the lower bottoms at 1.12252 and 1.11853. This could have alerted technical traders of a possible momentum reversal.
After the lower bottom, the bulls showed that they are hungry for action after the long down trend. The price broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator following suite by breaking through the baseline into bullish territory.
A possible critical resistance level formed on 26 November at 1.13282 and currently the bears are trying to bring the price down again with possible support level looming near the 1.12438 price level.
If the EURUSD manage to break through the critical resistance level at 1.13282, then three possible price targets can be considered from there. Attaching the Fibonacci tool to the top at 1.13282 and dragging it to the bottom of the possible support level at 1.12438, the following targets may be calculated. The first target can be estimated at 1.13803 (161.8%). The second price target may be at 1.14647 (261.8%) and the third and final target might be anticipated at 1.16012 (423.6%).
If the support level at 1.12438 is broken, the above scenario is annulled.
As long as the bulls continue to control the market and demand overcomes supply, the outlook for EURUSD on the Daily time frame will remain bullish.
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