EURUSD avoided great shakes at the start of the new trading year on Monday, holding muted marginally below the fresh 32-month high of 1.2309 reached last week.
Even though the RSI is currently pointing upwards, the indicator has already created a lower high within the bullish area, while the MACD is also following the same negative pattern below its red signal line, reducing the case of a meaningful upside correction in the price.
Technically, however, for the bears to come back on stage and drive the pair towards the lower ascending trendline, the supportive red Tenkan-sen line at 1.2230 and the 20-day simple moving average (SMA) underneath at 1.2180 should give way. Note that the 23.6% Fibonacci of the 1.1600 – 1.2309 upleg is also in the neighborhood, adding extra importance to the region. Breaking below the trendline, the 38.2% Fibonacci of 1.2038 could immediately attempt to block any move towards the 50-day SMA and the 50% Fibonacci of 1.1955.
In the positive scenario, if the bulls hold the reins, rallying above 1.2309, resistance may initially commence within the 1.2400 – 1.2450 restrictive zone last seen in early 2018. A decisive close beyond the upper resistance line, which joins the summer highs, could be a greater achievement and a confirmation of a well-built uptrend.
Overall, EURUSD maintains an upward trajectory in the big picture, though in the short run, the pair may face some weakness unless support at 1.2230 provides another opportunity to the bulls.
