EURUSD has shifted to a neutral bias after a bullish run from the 200-day moving average (MA) in May. The pair reached a high of 1.1909 on August 2 when the market failed to push higher after reaching overbought levels, as RSI rose above 70.
EURUSD has now entered a consolidation phase with immediate resistance at 1.1800. Recent price action shows firm support at 1.1652. This level is the 23.6% Fibonacci retracement of the uptrend from 1.0822 to 1.1909 (April 24 to August 2 rise). A daily close below this level could bring about a fall towards 1.1491 (38.2% Fibonacci) before reaching 1.1364 (50% Fibonacci). A deeper decline would weaken the overall bullish structure on the daily chart.
A break above 1.1800 shifts the focus back to the upside for a re-test of the August 2 peak of 1.1909, opening the way for a move up to the 1.2000 area.
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 MA above the 200-day MA on May 23 confirms the bullish outlook. While the momentum indicators (RSI and MACD) are still in bullish territory, they are suggesting fading upside strength and range trading is expected in the near-term.
