EURUSD is flirting with the 40-day simple moving average (SMA) today, after the aggressive rebound on the two-year low of 1.1106, achieved last Thursday. Currently, the pair has been developing within a narrow range of 1.1110 – 1.1260 as it failed several times to break from these obstacles. The technical structure suggests further upside movement as the MACD surpassed the trigger line and is moving towards the zero line, while the stochastic oscillator entered the overbought zone.
Should the price continue the upside reversal, immediate resistance would likely come from the 1.1260 resistance and the 23.6% Fibonacci retracement level of the downleg from 1.1815 to 1.1110 near 1.1275. A break above these levels could shift the short-term neutral bias and the medium-term descending outlook to a more bullish one, touching the 1.1325 barrier.
If prices return lower, support should come from first from the 20-day SMA around 1.1190, before slipping towards the two-year low of 1.1106. More losses could lead the price to test the lower bound of the downward sloping channel around 1.1000.
In brief, EURUSD is heading higher over the last two days in a consolidation area, while in the medium-term, it should continue its downside trend.
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