EUR/USD returns above 1.1100 after one-month low
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EUR/USD meets 50-day SMA.
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MACD falls below its trigger line.
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But stochastic indicates upside recovery.
EURUSD recorded a one-month low of 1.1065 on Monday after dollar strengthened amid the positive trade discussions between the US and China on Sunday. The pair found strong support near the 50-day simple moving average (SMA), which is acting as a strong turning point at the moment.
If the bears hold control and drive the price beneath the 50-day SMA, the next support area could come from the 1.0875 barricade. Below that, the restrictive region of 1.0740-1.0780, which encapsulates the 100- and 200-day SMAs as well as the medium-term ascending trend line, may prove to be a tough obstacle to break.
A break above the 1.1145 resistance level may pave the way for a move toward 1.1275 and the 20-day SMA at 1.1325. Rising further, the next battle could come from 1.1420 and the three-and-a-half-year high of 1.1572.
From a technical perspective, the MACD oscillator is heading lower below its trigger line; however, the stochastic oscillator is mirroring the latest upswing, turning higher in the oversold zone.
All in all, EURUSD has been positive since the bounce off 1.0176, but in the short-term view, the price is creating a downside retracement. The question is whether the negative move ended or if the pair will retest the uptrend line.
Author
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups.
