Off 7-month highs after bullish daily close

EUR/USD printed a bullish daily close above the March 3 high on Thursday.
A key indicator is reporting overbought conditions, but the bulls remain undeterred.

EUR/USD is currently trading at 1.1223, representing marginal losses on the day, having hit a high of 1.1245 during the overnight trade. That was the highest level since Aug. 6, 2019.

Bullish setup on D1

The pair jumped 0.93% on Thursday and closed well above the March 3 high of 1.1213, establishing a fresh bullish higher high on the daily chart.

Thursday’s gain also validated the single currency’s defense of the all-important 200-day average at 1.11 observed on Wednesday and signaled a continuation of the rally from February’s low of 1.0778.

The 14-day relative strength index has crossed into overbought territory above 70. The price chart, however, is showing no signs of buyer exhaustion.

All in all, the doors remain open for EUR/USD to extend gains toward the next major resistance lined up near 1.1282 (July 19, 2019 high).

A close under 1.1095 (Wednesday’s low) is needed to invalidate the bullish setup. That level could be breached if the global equities pick up a strong bid and post solid gains for consecutive days, weakening the haven demand for the EUR.