EUR/USD Price Analysis: Conflicting weekly and daily outlook, bulls in driving seat

• EUR/USD bulls remain in the driving seat above daily support.
• Bulls can look for a continuation towards critical Fibonacci levels. 
• Bears will be looking for a break of daily support for a weekly 38.2% Fibonacci retracement. 

EUR/USD net longs jumped higher, building on the gains of the previous two weeks which leaves a bullish bias on the longer-term projections. 

Moreover, while net positions are elevated from a historical perspective they remain well below this year’s highs. 

However, it could be argued, from a technical standpoint, that the price is overextended and is due a healthy correction.

The following top-down analysis offers something for both the bulls and the bears.

Weekly charts

Technically, the euro has not given anything back since bursting out from last year’s consolidation.

On the weekly chart, the price has not even retraced to a 38.2% Fibonacci which is usually expected following an impulse. 

The price can be argued to be somewhat overextended at this juncture and we have RSI divergence:

Daily chart

Using the daily chart, however, there is no scope of a downside correction until the recently formed support is broken at 1.2105 and 1.2058 below that. 

A close above 1.2161, the prior day’s highs, opens scope for a continuation of what would be expected to an extension of the December rally following the daily 38.2% Fibo retracement of the daily impulse. 

From a monthly basis, bulls can initially target a -0.618% Fibonacci of the monthly correction’s range at 1.2267, while from the daily correction’s range, a -0.272% Fibo target comes in at 1.2211.

Monthly chart