Technical Analysis – EURUSD extends consolidation slightly above parity

Aug 1, 2022 at 7:21 am GMT- Stefanos Oikonomidis

EURUSD has been trading within a tight range after it managed to rebound from the 20-year low of 0.9951. In addition, the price is currently standing below both its descending 50- and 200-day simple moving average (SMAs), endorsing a broader bearish technical picture.

The momentum indicators suggest a cautiously positive near-term tone. Specifically, the stochastic oscillator is sloping upwards after posting a bullish cross, while the MACD histogram has jumped above its red signal line but remains in the negative territory.

Should buying interest intensify, the price could challenge 1.0280, which is the upper boundary of the pair’s recent rangebound pattern. Piercing through this region, the bulls might aim for 1.0348 before the 1.0614 peak appears on the radar. Even higher, 1.0780 could prove to be a tough obstacle for the price to overcome.

On the flipside, bearish actions could send the pair to test the 1.0096 barrier. Sliding beneath that floor, the spotlight may turn to parity, which is considered a crucial psychological mark. A violation of the latter could pave the way for the 20-year low of 0.9951.

In brief, even though EURUSD has merely recovered, the price action remains in its long-term descending channel. Therefore, escaping this pattern to the upside could alter its sentiment to positive.