EUR/USD: Ingredients are in place for a resumption of the rally

The EUR/USD pair is trading in the red near 1.19, having faced rejection above 1.20 on Tuesday while Wednesday's 4-hour chart is showing that the pair exited overbought conditions. Yohay Elam, an analyst at FXStreet, believes EUR/USD is set to resume its rise with first resistance seen at 1.1930.

Key quotes

“The Relative Strength Index on the 4-hour chart is back to the balanced ground – out of overbought conditions. Euro/dollar trades above the 50, 100, and 200 Simple Moving Averages and momentum remains positive.”

“The daily high of 1.1930 has been separating ranges and serves as the first resistance line. It is followed by 1.1965, the peak in mid-August. The fresh 2020 peak of 1.2010 is next.” 

“Strong support is at 1.1880, that cushioned EUR/USD early in the week. It is followed by 1.1850, a stubborn resistance line last week. The next levels to watch are 1.18 and 1.1750.”