EURUSD remains under pressure and has been trading within a sideways channel since January 12 with upper boundary the 1.2540 resistance level and lower boundary the 1.2160 support level. During Friday’s trading session, the price snapped a three-day losing streak and posted a bullish candle.
Having a look at the bigger picture, the single currency has been developing within an ascending tendency versus the greenback over the last year.
Looking at the technical indicators, in the daily timeframe the MACD oscillator is falling marginally and is below the trigger line but remains in positive territory, while the RSI indicator is holding near the threshold of 50 with weak momentum. It is worth mentioning that the pair is stuck below the 20 and 40 simple moving averages (SMAs) and a bearish crossover has been created.
An upside potential move above the SMAs could drive the price towards the 1.2470 barrier. A successful break above this level could extend gains until the more than 3-year high of 1.2540.
An alternative scenario is a downward penetration of the trading range. The next key level to have in mind is the 1.2160 lower band of the range, below the uptrend line. Further losses could shift the medium-term bullish bias to bearish and push the pair until the 1.2080 obstacle. A drop below this region could open the way towards the 1.1900 handle
