EURUSD remains below the strong resistance level of the 23.6% Fibonacci retracement level around 1.1760 of the downleg from 1.2550 to 1.1510. However, since yesterday the world’s most traded currency surpassed the 20- and 40-simple moving averages (SMAs) in the daily timeframe, suggesting a possible upside correction.
From the technical point of view, the technical indicators are endorsing the bullish bias but are still moving with weak momentum. The RSI indicator is holding slightly above the threshold of 50, while the MACD oscillator is rising in the negative territory and is trying to jump above the zero line. Moreover, the %K line of the stochastic oscillator posted a bullish crossover with the %D line indicating some gains in the short-term.
Upsides moves are likely to find resistance at the aforementioned strong obstacle of the 23.6% Fibonacci mark (1.1760) before being able to re-challenge the 1.1840 significant resistance, taken from the June 7 high. Rising above this area would help shift the focus to the upside towards the 38.2% Fibonacci of 1.1910. Breaking this level could see a touch of the 1.2000 psychological level, which stands near the 200-SMA in the medium-term.
On the flip side, if the price dives below the short-term moving averages, the bearish phase would remain in play especially if the price hit again the 1.1510 – 1.1530 support zone. Clearing this key area would see additional losses towards the 1.1300 handle, identified by the high on November 2016.
To conclude, EURUSD would be in a trading range in the near term if it hits again the 1.1840 resistance and reverses lower again. Though, a climb above this level could endorse the scenario for a period of gains.
