- EURUSD returns within range between 1.0725 and 1.0930
- MACD and RSI detect a lack of directional momentum
- For the bears to recharge, a break below 1.0725 may be needed
- The outlook may turn bullish if the price breaks above 1.0930
EURUSD has been in a recovery mode since April 16 when it hit support near the 1.0610 area. Since then, the pair has been respecting an upside support line, which let it on Friday back within the sideways range that has been containing most of the price action since mid-November. This has turned the short-term outlook back to neutral.
Both the MACD and the RSI suggest a lack of strong directional momentum, corroborating the notion of a neutral picture for now. The former lies below zero, but above its trigger line, while the latter, although it returned above its equilibrium 50 level, has been flattening.
For the bears to be considered in charge again, EURUSD may need to fall below both the 1.0725 zone, which is the lower end of the aforementioned range, and also below the newly established upward sloping trendline. Such a dip could initially aim for the 1.0610 barrier, the break of which could encourage more sellers to jump into the action and perhaps push the price towards the 1.0520 zone, which offered support between October 18 and November 1.
On the upside, the pair is still capped by the downtrend line taken from the high of December 28, but even if the bulls breach it, they may feel more comfortable taking the steering wheel after EURUSD breaks the upper bound of the range at around 1.0930. After that, their next test may be at around 1.1000.
To recap, EURUSD continued moving higher, returning within the sideways range between 1.0725 and 1.0930. For the outlook to shift either bullish or bearish, traders may need to exit that range again.
