The EUR/USD currency pair proved its worth on Wednesday, keeping above the 1.1300 level. The two had hit a small bump sideways in what had been a constant up day. Bullishness is tempered with reality as it still trades well below set boundaries indicative of some price fortitude. Analysts point out the duo is going through a bullish consolidation phase. A few technical indicators point to bullish momentum being just around the corner.
The longer the day went on, the further the EUR/USD contract climbed, showing that bullish buyers are still alive and kicking. The duo is now sitting on a horizontal 20 Simple Moving Average (SMA), located around 1.0970. However, this 200-day moving average is the lowest it’s been relative to today’s trading level. Yet, it is a sign that buyers are in control, given how much the pair trades above all its moving averages.
Technical analysis shows that the 20 SMA is decidedly bullish, as it sits atop the 100 and 200 SMAs. Aside from that, the way this structure is laid out displays a pretty clear upward trend. Further confirming the bullish sentiment is the fact that the 100 and 200 SMAs slant upward. Even though longer-term, 50 and 200-day moving averages are well below current trading levels, they remain on a long positive trajectory. This trend deepens the argument that the duo is working with a rock-solid bullish backdrop.
At the moment the EUR/USD pair is neutral on the 4-hour chart. It’s currently perched above all major moving averages, but it has so far failed to establish a definitive direction for a breakout or retracement. This apparent neutrality can take the form of a waiting game, a consolidation before any major reactivity or movement takes place. This is a factor all traders are watching with great interest, as any change in the current state of market dynamics can result in heightened volatility.
Though it has run out of negative momentum on the shorter timeframes, the longer-term view for the EUR/USD pair seems bright. The combination of its position above key moving averages and bullish signals from the 20 SMA suggests that buyers may continue to exert influence over the currency pair in the coming days. Conclusion Investors should be vigilant as market conditions change and new tactical trading opportunities present themselves.