EUR/USD technical analysis: Floats to 200-MA as dollar takes a whack

EURUSD, although having marginally peeked above its 200-period simple moving average (SMA) at 1.1870, is being curbed by the neighboring defense of 1.1880-1.1900. The recent upwards traction in the pair may be related to the patient comments about normalizing from Chairman Powell of the Federal Reserve in yesterday’s FOMC meeting.

Lately, the 50- and 100-period SMAs have been revealing that negative forces in the pair to some extent were subsiding, but their persistent neutral bearings are suggesting they have yet to be convinced about the sustainability of the fresh bullish impetus in the pair. The Ichimoku lines are also showing a pause in upward drive, while the positive tone in the short-term oscillators is starting to wane a tad. The MACD is strengthening above its red trigger line in the positive section, while the stochastic %K line has thus far managed to preserve a positive charge above the 80 marks. However, the RSI is fighting to keep its climb in the positive territory alive.

At this point, the price is barely above the 200-period SMA at 1.1870, and for upside momentum to intensify, the pair would need to conquer the critical capping zone of 1.1880-1.1900. Should this scenario come to fruition, thus reinforcing confidence in the climb, the price could then propel for the 1.1944 barriers before challenging the resistance barricade of 1.1969-1.1983.

Otherwise, if the hard border below 1.1900 endures, sellers may dip below the 200-period SMA encountering initial support around the 1.1850 and 1.1840 obstacles respectively, ahead of the red Tenkan-sen line at 1.1824. Then the support zone from the blue Kijun-sen line at 1.1815 until the cloud’s lower surface at 1.1791 could glue the pair around the 1.1800 marks again. However, a dive below the cloud may meet the 1.1771 low before testing the support base of 1.1737-1.1762.

Summarizing, for EURUSD’s negative tendencies to snowball, the price would need to break below the 1.1703 level. That said, as long as the pair persists below the 1.1900 barriers, its neutral-to-bearish tilt will have the upper hand.