Technical Analysis – EURUSD returns lower after touching 27-month high above 1.1900

Melina Deltas, XM Investment Research Desk

EURUSD had been in a strong bullish rally until it reached a new 27-month high of 1.1915 on Thursday, that caused the pair to correct down below the 1.1800 round number.

The technical indicators are losing momentum as the MACD completed a bearish crossover with its trigger line, while the RSI is hovering near the 70 level, failing to improve any positive actions. The 20- and 40-day simple moving averages (SMAs) are still heading upwards.

Immediate support for further downside movement could be coming from the 1.1696 barrier and the 20-day SMA currently at 1.1656 before testing the 23.6% Fibonacci retracement level of the up leg from 1.0635 to 1.1915 at 1.1620. More declines could open the door for the 1.1570 – 1.1495 support levels ahead of the 40-period SMA at 1.1495 and the 38.2% Fibo of 1.1427.

In the opposite scenario, a jump above the 1.1800 number could take the price towards the 27-month high of 1.1915. A rally above this line could rest near the 1.2000 psychological level and the 1.2160 – 1.2200 zone, taken from the inside swing lows from February and March 2018.

Concluding, in the bigger picture, EURUSD has been in an extremely positive tone over the last sessions, creating seven consecutive green weekly candles.