EUR/USD Price Analysis: Still inside the woods below 1.0200
- Volatility contraction escalates on a follow-up Diamond after a consolidation.
- Overlapping 50-EMA with asset prices is hinting at a sideways move ahead.
- The shared currency bulls are continuously facing barricades around 1.0200.
The EUR/USD pair has displayed a gradual decline and has slipped to near 1.0193 after failing to surpass the critical hurdle of 1.0220 in the New York session. On a broader note, the asset is advancing modestly after printing a low of 1.0146 last week. The asset is facing barricades in establishing above the psychological resistance of 1.0200
A formation of a Diamond pattern after a prolonged consolidation indicates that the asset is still inside the woods and will take sufficient time to conclude its volatility contraction. Usually, a breakout of a volatility contraction in an asset is followed by volumes and wide-range ticks.
The 50-period Exponential Moving Average (EMA) at 1.0193 is overlapping with the asset prices, which signals a consolidation ahead.
Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which indicates that the market participants are awaiting a fresh trigger for a decisive move.
A decisive move above Thursday’s high at 1.0254 will drive the asset towards the August 2 high at 1.0294, followed by June 15 low at 1.0359.
Alternatively, the greenback bulls could cripple the upside bias if the asset drops below July 27 low at 1.0097, which will drag the asset towards July 14 high at 1.0050. A breach of the latter will unleash the greenback bulls for more downside towards July 14 low at 0.9952.
EUR/USD hourly chart
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Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
