Is EUR/USD Heading for 1.15 As Buyers Make New Highs?

Yesterday, the Euro rose sharply by more than 1% against the USD during early US session due to a weaker dollar and better than expected German economic data. Concerns about the US banking sector hurt the risk sentiment as shares of troubled First Republic Bank continued to fall sharply for a second consecutive day.

The Euro managed to climb back above the 1.10 level and hit a new high for this year at 1.1095. This reversal of Tuesday’s bearish engulfing pattern into a bullish signal is a positive sign for EUR/USD buyers, as they were able to fully reverse the nearly 0.7% drop from the previous day. Additionally, the bullish technical analysis further support the near-term outlook for this pair.

However, for a bullish continuation, the Euro needs to sustain a break above the former top at 1.1075, which was last seen on April 14. In the event of partial profit-taking after yesterday’s strong bullish acceleration, the dips should stay above the psychological support level of 1.10 to keep buyers in control. So, a break of the highs at 1.1075/1.1095 would signal a continuation of the bullish trend.