Technical Analysis – EURUSD cautiously bullish; capped by 200-day SMA

Anthony Charalambous, XM Investment Research Desk

EURUSD sellers are in the process of halting buyers’ efforts to push above 1.1179 – which is the fresh swing high of October 21, following a three-week ascent – to retest the 200-day SMA. The short-term has shifted into what looks like a neutral market, something also backed by the flat Tenkan-sen and Kijun-sen lines.

However, the positive momentum in the technical indicators is still intact but slightly reduced. The RSI, currently in bullish territory, is sloping slightly downwards. The MACD, deep in positive regions, is above its red trigger line but has eased.

To the upside, the bulls initially face pressure at the 1.1179 upper boundary of the range and also slightly above at the 200-day simple moving average (SMA) around 1.1190. Next, the neighboring 1.1207 resistance, which is the 61.8% Fibonacci retracement of the down leg from 1.1411 to 1.0878, could apply downside pressure ahead of the swing peak of 1.1249 from August 6. Moving higher, the 76.4% Fibo of 1.1285 could attract attention.

If the sellers retake control, steering below the 50.0% Fibo of 1.1145, the 100-day SMA around 1.1120 could hinder the drop. Lower within the range, the bears may encounter a congested region of supports from 1.1108 to 1.1072, consisting of the inside swing of September 13, the 20-day SMA and the 38.2% Fibo of 1.1082 before the 1.1072 lower boundary.

In brief, the short-term bias looks neutral-to-bullish, with a break above 1.1179 needing a confirmation above 1.1207. However, a close below 1.1072 could increase the odds for further declines.