EUR/USD has gathered bullish momentum to start the week. As FXStreet’s Eren Sengezer notes, the pair's technical outlook points to a bullish tilt in the near term.

EUR/USD could stage a technical correction before stretching higher

“EUR/USD pierced through the 200-period SMA on the four-hour chart and the 20-period SMA crossed above the 50-period and 100-period SMA's during the latest rally, reflecting the strong buying interest in the euro. However, that the Relative Strength Index on the same chart is about to rise above 70, suggesting that the pair could stage a technical correction before stretching higher.”

“On the downside, 1.0160 (Fibonacci 61.8% retracement level of the latest downtrend) aligns as key technical support. In case the pair manages to hold above that level, it could test 1.0200 (psychological level) and target 1.0245 (static level) and 1.0280 (static level) afterwards.”

“With a decline below 1.0160, sellers could show interest and drag the pair toward 1.0100 (200-period SMA, Fibonacci 50% retracement).”