• EUR/USD is likely to consolidate further on symmetrical triangle formation.
• The shared currency bulls are playing with the 200-EMA at around 0.9856.
• The RSI (14) has shifted into the bullish range, which advocates the Eurozone bulls.

The EUR/USD pair has dropped marginally after printing a day’s high at 0.9853 in the Tokyo session. After a juggernaut rally, the shared currency bulls are facing a corrective move as the US dollar index (DXY) has attempted a rebound move. Meanwhile, positive risk sentiment is still elevated as S&P500 is solid with recent gains.

On a four-hour scale, the asset is auctioning in a symmetrical triangle formation that indicates a volatility contraction. An explosion of volatility contraction leads to wider ticks and heavy volume in the counter. The downward-sloping trendline of the above-mentioned chart pattern is placed from September 13 high at 1.0187 while the upward-sloping trendline is plotted from September 28 low at 0.9536.

The asset is hovering around the mighty 200-period Exponential Moving Average (EMA) at 0.9856. An upside break of the same would strengthen the Eurozone bulls further.

However, the Relative Strength Index (RSI) (14) has entered into the bullish range of 60.00-80.00, which indicates more upside ahead.

For an upside move, the shared currency needs to push the asset above the round-level resistance of 0.9900, which will send the pair toward parity. A confident break above the parity will expose the Eurozone bulls to hit September 20 high at 1.0050.

Alternatively, the shared currency bulls could lose their grip if the asset drops below Thursday’s low of 0.9630, which will drag the asset toward September 28 low at 0.9536. A breakdown of the September low will strengthen the greenback bulls further and will drag the asset toward the critical support of 0.9500.

EUR/USD four-hour chart