EURUSD broke past a major resistance zone and is currently pulling back to this former ceiling that could hold as support. The pair is testing the area around 1.1647, which lines up with the 50% Fibonacci retracement level and could be enough to attract bullish momentum for another leg higher.

The Fibonacci retracement tool shows where more buyers could be waiting to join in. The 38.2% Fib is located at 1.1685, while the 50% level sits at 1.1647. A larger correction could reach the 61.8% Fib at 1.1609, which is close to the broken resistance zone and the 200 SMA dynamic inflection point. This could be the line in the sand for a bullish pullback.

If any of these Fibs are able to keep losses in check, EURUSD could resume the climb to the swing high around 1.1808 or higher. A break below the lowest Fib and former resistance, on the other hand, could set off a drop back to the lows near 1.1483 or lower.

The 100 SMA (blue) is above the 200 SMA (red) to confirm that the path of least resistance is to the upside or that the rally is more likely to gain traction than to reverse. The gap between the indicators is widening to reflect strengthening bullish pressure, with both moving averages positioned below current price action as dynamic support levels.

Stochastic has reached the oversold region to reflect exhaustion among sellers and appears to be turning higher to show a return in buying interest. The oscillator has plenty of room to climb before reaching the overbought area, which means that the rally could keep going once it resumes.

RSI is also moving up from the lower area, so price could keep following suit while buyers regain control. The oscillator has some ground to cover on its move north, suggesting that bullish momentum could stay in play for much longer.