EURUSD maintains a broadly bullish technical set up above 1.1800 although there is evidence of a slowdown in upside momentum. The MACD and RSI indicators are no longer rising and are giving a neutral picture for the short-term. The market is in a consolidation phase near its 31-month high of 1.1909.
Recent price action shows firm support around the 1.1652 area, which is the 23.6% Fibonacci of the April 24 to August 2 rise from 1.0820 to 1.1909. A breakdown of this level would set up a possible move lower to 1.1491 (38.2% Fibonacci). From here the focus would shift to a key level – the 50% Fibonacci at 1.1364. A deeper decline would weaken the short-term bullish structure.
EURUSD is expected to stay underpinned as long as it can hold above 1.1800. A daily close above this level would set up a possible break above the August 2 peak of 1.1909, which would open the way for a move up to 1.2000.
The overall trend structure shows that the bull run is expected to remain intact, with EURUSD rising in an ascending channel. The crossover of the 50-day moving average (MA) above the 200-day MA on May 23 confirms the bullish outlook. A consolidation phase is seen in the near-term.
