EUR/USD: Correction is coming, stretched overbought conditions

The EUR/USD pair is trading at 1.1892 at press time, having put in a 25-month high of 1.1905 earlier on the day. Nonetheless, Friday's 4-hour chart is pointing to stretched overbought conditions, which implies a deep correction, FXStreet’s analyst Yohay Elam.

Key quotes

“The Relative Strength Index on the 4-hour chart is considerably above 70 – showing overbought conditions and implying a sharp correction. Euro/dollar appears overbought also on the daily chart.” 

“The fresh high of 1.1909 is the immediate line of resistance, and there are no notable caps until the all-important 1.20 level which was a swing high in May 2018.”

“Looking down, 1.1850 was a peak in the summer of 2018 and is now support. It is followed by 1.1805, the initial peak earlier this week, and then by 1.1780.”