EUR/USD has extended its rebound after breaking a short-term downtrend, but is now stalling near major resistance around 1.18, where near-term consolidation may decide whether a larger bullish trend unfolds, Société Générale's FX analysts note.

Breakout extends, but pullback emerging

"EUR/USD broke out from a short-term descending channel earlier this month resulting in extension of bounce. It has reached the upper part of its multi-month range near 1.1800/1.1830, which could act as an interim resistance zone."

"A brief pullback is taking shape; defence of the 50-DMA near 1.1610 would be crucial for persistence in up move. If the pair establishes beyond 1.1800/1.1830, a larger uptrend is likely. The next objectives could be located at September peak of 1.1920 and 1.2000."