For the past two weeks, EURUSD has been neutral but the underlying market structure is bullish in the medium term, as the pair rose from 1.0951 (July 25) to 1.1365 (August 18) and is now consolidating this move.
Following a 50% retracement of this upleg, the pair found support at the 50-day and 200-day moving average (around 1.1130). Prices subsequently bounced higher but found strong resistance at the 23.6% Fibonacci retracement level at 1.1268. The near term bias is now neutral and the market is stuck in a two-week range between 1.1207 (38.2% Fibonacci) and the 23.6% Fibonacci. RSI is flat and suggests consolidation in the near term.
EURUSD would have to break above the key 1.1300 level to confirm the underlying bullish market structure and this would open the way towards the 1.1365 peak.
A break below immediate support at the 38.2% Fibonacci (1.1207) would see prices target the 50% Fibonacci and the 50 and 200-day moving averages. Below this, prices would see a deeper decline towards 1.1109 (61.8% Fibonacci) and this would eliminate the bullish market structure.
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