EURUSD has been underperforming in the past couple of sessions in the 4-hour chart, challenging the 1.2130 support level again, which has been acting as strong support over the last three days.
In the very short-term, the RSI is continuing to head south in the bearish territory, suggesting more losses, however, the stochastic oscillator rebounded on the oversold zone, creating a bullish crossover within its %K and %D lines, indicating a possible pullback. In trend indicators, the simple moving averages (SMAs) are moving lower with the 20-period SMA approaching the current market price.
If price action remains above 1.2130, there is scope to test the 1.2220 resistance, which overlaps with the 100- and 40-period SMAs, around the Ichimoku cloud. Clearing this key level would see additional gains towards 1.2287 before meeting the 33-month high of 1.2350.
If the 1.2130 support fails, then the focus would shift to the downside towards the 1.2060 support, registered on December 9, which if breached would increase the short-term downside pressure and bring about a reversal of the trend, hitting the 1.2000 psychological number.
Overall, EURUSD has been neutral-to-bearish as it is being capped by the SMAs and the 1.2220 resistance. Near-term weakness is expected to remain as long as price action takes place within the 1.2130-1.2220 range.
When looking at the bigger picture the pair has been in an ascending movement from 1.0635.
