EURUSD retraces to the high from last week and bounces

The EURUSD experienced a strong rally today, as an early Asian session dip found support at the upper edge of a crucial swing area between 1.0690 and 1.0704 (refer to the blue numbered circles in the chart above). The subsequent sharp upward movement propelled the price beyond another swing area, ranging from 1.0744 to 1.0752, and surpassed last week's failed break high at 1.07592. Today's peak reached 1.07879, just shy of the next upside target zone between 1.0799 and 1.0805.

Following the day's high, a corrective move brought the price back down towards last week's high at 1.07592, where support buyers stepped in. Maintaining the 1.07592 level firmly establishes the buyers' control. Only a drop below this level and the swing area extending to 1.0744 would bolster sellers' confidence, likely resulting in further downside probing.

In the absence of such a move, the buyers maintain the upper hand. If the price surpasses today's high of 1.07879, traders will aim for the previously mentioned swing area between 1.0799 and 1.0805. Keep an eye on these critical levels to gauge the direction of the EURUSD going forward.

The move to the upside today's been supported by higher yields in Europe. The German 10 year yield is up 17.3 basis points. Meanwhile the US 10 years up to 10 basis points. Stocks in Europe remain elevated as well with the German Dax up 1.82%. France's CAC is up 1.48% and Spain's Ibex is up 2.61%.