The EUR/USD may be close to breaking outEuro / United States DollarCMCMARKETS:EURUSDcmcmarketsEUR/USD is approaching a key resistance zone that could extend its recent rally if the pair manages to break higher. The exchange rate is currently trading above its 200-day moving average, which could prove significant and may point to further euro strength if EUR/USD clears resistance around $1.1660. A confirmed breakout could open the way for a move towards the $1.1790 to $1.1820 range. However, EUR/USD is also approaching overbought territory, suggesting that the rally could pause before extending further. The relative strength index is currently around 70, while the pair is closing in on the upper Bollinger Band near $1.1660. This means that any further gains may increase the risk of a pullback, either to retest the breakout level or to enter a period of sideways consolidation. If the breakout attempt fails and EUR/USD falls back below $1.1600, the risk of a deeper pullback would increase. In that scenario, the pair could test support near the bottom of its previous consolidation range around $1.1520. A break below that level would point to a more severe decline, potentially back towards $1.1370. For now, however, the bulls appear to be taking control. Written by Michael J. Kramer, founder of Mott Capital Management. Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction, or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.