EUR/USD technical analysis: Consolidates under 50-day SMA; upside risks remain

Anthony Charalambous, CFTe XM

EURUSD is resting on the 1.1707 level, that being the 23.6% Fibonacci retracement of the up leg from 1.0726 to 1.2010, capped by the mid-Bollinger band. The simple moving averages (SMAs) command a bullish tone while the short-term oscillators convey mixed signals in directional momentum.

The MACD and the RSI are transmitting a slight improvement in the pair with the MACD, in the negative region, pushing above its red trigger line and the RSI attempting to break above the 50 threshold. However, the stochastic oscillator has shifted negative, flashing further weakening in the price.

To the downside, immediate support may occur from the 23.6% Fibo of 1.1707 ahead of a key trough at 1.1612, where the lower Bollinger band is also located. A dive past this may then be challenged by the 100-day SMA, currently at 1.1534 and the adjacent limiting section from the 38.2% Fibo of 1.1519 until the 1.1496 inside swing high of March 9. Extra loss of ground may communicate frailty in the pair, seeing it hit the 1.1451 barrier before the focus turns to the 50.0% Fibo of 1.1368.

However, if buyers resurface, resistance may originate from the curbing mid-Bollinger band at 1.1762 and the overlaying 50-day SMA above at 1.1803. Climbing higher, the bulls may encounter the 1.1871 border before the highs of 1.1900 and 1.1916, which encapsulate the upper Bollinger band, attempt to shackle further advances. Surpassing these obstacles, the pair may jump to revisit the 28-month peak of 1.2010 and the 1.2055 barrier overhead.

Summarizing, EURUSD relays a neutral-to-bullish bias above 1.1612, the 100-day SMA and the 38.2% Fibo of 1.1519.

Author

Anthony Charalambous, CFTe

Anthony Charalambous joined XM in 2019 and specializes in preparing daily technical analysis, using his years of trading experience to provide detailed forecasting for all major asset classes such as forex, indices, commodities and equities.

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