EURUSD opened with weak momentum on Monday, tiptoeing sideways within last week’s tight range of 1.0940-1.0988.
Despite the muted tone in the market, the technical picture remains encouraging. The price has been trading within a short-term bullish channel over the past month and slightly above its exponential moving averages (EMAs), while it recently secured a strong foothold around the 50% Fibonacci retracement of the 2021-2022 downtrend and the ascending line from October.
Meanwhile, some caution might be necessary as the RSI and the MACD seem to be losing impetus. Yet, the former is still fluctuating comfortably above its 50 neutral mark, while the latter is also clearly above its zero line, endorsing the positive trajectory in the market.
If the bulls cross above the 1.0988 border, which they could not successfully claim in February, the recovery may speed up towards the channel’s upper boundary seen around 1.1130. A continuation above the 1.1183-1.1230 zone could then clear the way towards the 1.1365 resistance and the 61.8% Fibonacci of 1.1450.
Alternatively, the pair may come under renewed selling pressure if the 1.0940 support region collapses and the price slides below its 20-day EMA. If that proves to be the case, the 50-day EMA currently at 1.0825 may immediately attract attention ahead of the 1.0735-1.0700 area. Moving lower, the bears may next target the 200-day EMA and the 38.2% Fibonacci level of 1.0609.
In brief, the short-term risk for EURUSD remains skewed to the upside, sustaining hopes for a bounce up to the channel’s upper bar despite the latest horizontal move in the price.
