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EURUSD: Bullish breakout or fakeout?

The EUR/USD had a strong session on Wednesday with the bulls pushing the pair towards 1.32 before re-tracing to close at 1.315. The pair kicked off the day in a negative footing and it looks like we will some noise here. The 1.32 resistance level has contained the pair in the past weeks, which makes it a key area for the direction of the pair. After breaking above a declining trend line and with the RSI above its neutrality area, the trend remains on the upside on the daily chart, but we need to see a consistent break above the critical 1.32 area before we ride the bull trend. A break above 1.32 would open the door for 1.327 and 1.33. In the alternative scenario, we would have to see the downside penetration of 1.305, before shorting the pair but this is hard to imagine at the moment.

Dafni Serdari
Market Analyst
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