EUR/USD set to jump above double-top on a Fed dovish message

EUR/USD has retreated from near 1.2250, the highest since February. Nonetheless, the Federal Reserve's meeting minutes can send the pair to new highs. Furthermore, looser restrictions in the old continent can send the euro above double-top, Yohay Elam, an Analyst at FXStreet, briefs.

The charts are pointing to fresh gains

“France is allowing outdoor dining and additional activities as its accelerated vaccination drive is bearing fruit and bringing COVID-19 cases down. Other countries in the eurozone are experiencing the same trend and enacting similar policies.”

“Minutes from the Federal Open Markets Committee (FOMC) are due out later in the day. So far, only Dallas Fed President Robert Kaplan has spoken in favor of hiking interest rates in 2022 rather than later on. Only if the minutes reveal that Kaplan is part of a growing chorus – highly unlikely – the dollar has room to rise. Otherwise, it could trigger the next round of greenback grinding.”

“EUR/USD is benefiting from upside momentum on the four-hour chart and the Relative Strength Index (RSI) has dipped below 70 – thus exiting overbought conditions. The currency pair is also trading well above the 50, 100 and 200 simple moving averages – another bullish sign.”

“Critical resistance is at around 1.2245, which is the recent peak that almost perfectly coincides with the February high of 1.2243 – a double-top. It is followed by 1.2280, and by the 2021 top of 1.2350.”

“Some support is at the daily low of 1.2204, followed by 1.2080, May's previous high point, and then by 1.2150 and 1.2105.”