EURUSD had been trading inside a descending triangle before breaking higher to signal that a rally of the same height as the chart pattern is due. Price retreated to the former resistance, which now seems to be holding as support.

The Fibonacci extension tool shows the next upside targets, as the pair is already testing the 38.2% extension at the 1.0750 minor psychological mark. Stronger bullish momentum could take it to the 50% level at 1.0762 or the 61.8% Fib that lines up with the swing high at 1.0775. The 76.4% level is at 1.0790, then the full extension is at 1.0815.

The 100 SMA just crossed above the 200 SMA to confirm that the climb is more likely to gain traction than to reverse. The moving averages also line up with the broken triangle top to add to its strength as support.

However, stochastic is heading down from the overbought zone to signal exhaustion among buyers and a likely return in selling pressure. The oscillator has plenty of room to slide before reflecting exhaustion among sellers.

RSI, on the other hand, still has room to climb before reaching the overbought zone to signal exhaustion among buyers, so the rally could keep going.

EURUSD is likely to take cues from the upcoming release of FOMC meeting minutes for June, as the shift to a less dovish Fed rhetoric could be highlighted during the discussions. On the other hand, the lack of hawkishness could still bring downside for the dollar since expectations are running high.

Later in the week, the NFP report is up for release and is slated to show weaker hiring for June. If that’s the case, the US dollar could be in for more weakness, as traders revive calls for more Fed easing. Weaknesses in underlying data such as labor force participation and average hourly earnings could impact USD direction as well.