EURUSD: Euro Posts Bullish Breakout, Further Gains Likely

The EURUSD pair surged more than 100 pips on Thursday and closed at two-month highs, slightly below the 1.18 handle. On its way up, the euro has risen about the very important resistance of previous tops at 1.1745 and this is now the key support for bulls in this upside wave.

Should the rally continue, the next target might be at another strong level of 1.1850, where previous highs and lows were converged and larger selling offers could be located here. If this level falls, the trend could switch to bullish, targeting the psychological level of 1.20.

On the downside, the price needs to stay above the mentioned support of 1.1750 to continue in this bullish structure. Falling below could mean further correction toward the bullish trend line, which is currently at 1.1650/60. However, if the pair defends this trend line, the outlook still seems positive.

The greenback failed to capitalize on rising US yields, which have surged recently and sentiment remains bearish for the US dollar as it has been dropping broadly in the recent days (excluding against the yen).

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