Technical analysis – EURUSD bulls do not look exhausted yet; 1.1880 level eyed

Christina Parthenidou, XM Investment Research Desk

EURUSD found strong resistance at 1.1879 on Wednesday, but earlier today the pair completed a bullish doji in the four-hour chart, suggesting that there is more strength in store as the price is making efforts to recoup its moderate losses. Still, the weakness in the MACD hints that some caution should be warranted.

A break above 1.1880 is expected to immediately stall within the 1.1900-1.1920 area. Moving higher, the next obstacle could occur around 1.1950, while above that, all eyes will turn to the 1.1987 level, which the bulls were unable to successfully overcome early in September.

If the bears dominate, sending the price below 1.1830, the 20-period simple moving average (SMA) currently at 1.1810 may provide some footing. Breaching that line too, a tougher barrier may emerge within the 1.1770-1.1753 zone, which if violated would open the way towards the 1.1705 mark.

In the bigger picture, the market maintains a neutral profile, consolidating between the 1.1611 and 1.2009 boundaries.

Summarizing, EURUSD may attempt to regain ground in the short-term, but it should first remove the 1.1880 barrier to bring new buyers to the market. Alternatively, a downside correction could see an extension below 1.1830.