EUR/USD Price Analysis: Bulls pierce 2020 descending trendline
- EUR/USD's two-month bearish trend ended with Thursday's sharp gain.
- Thursday's bullish marubozu candle suggests the path of least resistance is to the higher side.
EUR/USD jumped by over 1% on Thursday, violating the descending trendline falling from Dec. 31 and Feb. 3 highs.
The upside break of the trendline indicates the bearish trend from the Dec. 31 high of 1.1240 has ended and the bulls have regained control.
More importantly, the EUR breached the falling trendline with a bullish marubozu candle, which occurs when the bulls control the price action from the opening bell to the closing bell. It comprises a big green body and little or no shadows and is considered an indicator of strong bullish sentiment.
The 14-day relative strength index has also crossed into the bullish territory above 50. The pair, therefore, could challenge the 50-day average resistance at 1.1026, possibly after a minor pullback, as the hourly chart RSI is reporting overbought conditions.
A bearish reversal would be confirmed if the spot finds acceptance under Thursday's low of 1.0876.