The EUR/USD pair has marked its third consecutive day of gains, trading around 1.1670 during Asian hours on Wednesday. A look at the daily chart reveals a bullish reversal as the currency pair climbs above a descending channel pattern.
After an initial downward trend, the EUR/USD has bounced back above its 9-day and 50-day exponential moving averages (EMAs), which creates an interim bullish sentiment.
The 14-day Relative Strength Index (RSI) currently sits at 56, suggesting positive momentum above the midline. This indicates support for a recovery while alleviating short-term downside pressure. As long as the EUR/USD stays above this recent breakout level, it appears that buyers could take the lead, with potential for further movement if it manages to hold above the shorter moving average cluster.
If the pair continues to rise, it might set its sights on the six-week high of 1.1795 established on March 2nd. Further advancements could allow for exploration around 1.2082, marking the highest point since January 27th, 2021.
For near-term support, the EUR/USD may find backing at the 50-day EMA around 1.1632, followed by the 9-day EMA at 1.1575. Should the pair revert to the descending channel, it might face downward pressure, potentially testing the eight-month low of 1.1411 recorded on March 13th. A more significant decline could push it down towards 1.1220 within the descending channel.
