EURUSD has been consolidating gains within the 1.2077-1.2150 restrictive area since rising to a two-year high of 1.2176, kindly supported by the red Tenkan-sen line.
Despite the neutral mode, the pair does not seem to be in a troubled zone, but appears to be in a pause after a steep rally that will likely see a continuation towards the 1.2240 barrier if the 1.2150 resistance gives way. The upper surface of the ascending channel would be another important obstacle around 1.2300 if the bulls keep the lead higher.
The momentum indicators cannot exclude the above scenario as the RSI, although weaker, is refusing to post lower lows within the bullish terittory so far, while the MACD continues to hold above its red signal line despite stabilizing. The upward-sloping red Tenkan-sen line, which is fluctuating well above the blue Kijun-sen line, is another positive indication that the bullish fiesta is not over yet.
Still, traders should keep in mind that a close below the 1.2077 floor may generate additional losses towards the bottom of the channel and the 20-day simple moving average (SMA) around 1.2000. Such a downside may not be worrisome unless the price forcefully breaks below the channel and moves towards the 1.1885 – 1.1840 restrictive region.
Summarizing, an extension of the bullish trend remains a basic scenario in the EURUSD market, but first the pair would need to clear the 1.2150 ceiling.
