EUR/USD Price Analysis: Poised to retest multi-year tops, around 1.2270-75 area

• EUR/USD has been scaling higher along a one-week-old ascending trend-line.
• The set-up favours bullish traders and supports prospects for additional gains.

The USD selling bias remained unabated through the early European session and pushed the EUR/USD pair to three-day tops, around the 1.2225-30 region in the last hour.

From a technical perspective, the pair built on last week's bounce from the 1.2125-30 congestion zone and has been scaling higher along a one-week-old ascending trend-line. The mentioned support is currently pegged near the 1.2185 region, which should now act as a key pivotal point for intraday traders.

Meanwhile, technical indicators on hourly/daily charts maintained their bullish bias and support prospects for an extension of the short-term uptrend. That said, holiday-thinned trading conditions warrants some caution for bulls before positioning aggressively for any further near-term appreciating move.

Nevertheless, the EUR/USD pair still seems poised to aim back to retest over two-and-half-year tops, around the 1.2270-75 region, touched earlier this December. The momentum could get extended beyond the 1.2300 level and lift the pair further towards the 1.2340 intermediate resistance en-route the 1.2400 mark.

On the flip side, failure to defend the mentioned trend-line support near the 1.2185 region might prompt some technical selling and drag the EUR/USD pair back towards the 1.2130-25 area. Some follow-through selling might negate the positive outlook and paving the way for a slide towards the 1.2160-55 support zone.

EUR/USD 1-hourly chart

Technical levels to watch