EUR/USD rejected at 127.2% Fib extension, holds above 1.22

• EUR/USD failed to cut through 1.2236 (127.2% Fib extension).
• The technical setup remains bullish.

The greenback took another beating in Asia, pushing the EUR/USD to an intraday high of 1.2240.

However, the currency pair failed to hold above 1.2236 (127.2% Fib extension of the Nov low-Nov high-Dec low), possibly due to overbought conditions as highlighted by the RSI on the dailies, 1-hour and 4-hour chart.

Still, the outlook remains bullish. Chris Svorcik from Admiral Markets says, "the EUR/USD is continuing with the uptrend after breaking the horizontal resistance levels (dotted red). Price seems to be in a wave 3 (purple) of wave 3 (pink) at the moment and potential dips are most likely retracements within the larger bullish movement."

That said, with US financial markets closed for a holiday, the pair is unlikely to see big moves but may remain well bid above 1.22 as markets continue to sell USD on increased prospects of faster policy tightening in the Eurozone, Japan, and the UK.

EUR/USD Technical Outlook

AceTrader Team writes, "Friday's spectacular rally above 2017 high at 1.2093 (now sup) to a 3-year peak of 1.2218 near NY close suggests euro's uptrend would resume after minor consolidation, however, overbought condition is likely to prevent strong gain and reckon projected res at 1.2275/80 may hold on 1st testing and yield a much-needed modest retracement later today in holiday-thinned N. American session or tomorrow.

On the downside, only below 1.2150/60 may risk stronger pullback to 1.2132/37 before prospect of another rise later this week."