EUR/USD climbed above 1.1230 on Tuesday, holding onto its weekly advance as the negative momentum in the US dollar persists. Analysts are noting that the currency pair is missing a positive catalyst for any additional gains. Consequently, participants in the markets continue to be on a wary wait and see basis.
The current trading environment reflects a mixed sentiment, particularly as the daily chart for EUR/USD indicates limited bullish scope. The currency pair has pulled back from a now bearish 20 Simple Moving Average (SMA) for the second consecutive day. Looking ahead, it now faces massive dynamic resistance at the 1.1275 mark. This resistance level has been historically pivotal, stanching any bullish upside progress for EUR/USD.
Both the 100 and 200 SMAs are still quite a distance below where we’re currently trading. At the same time, the longer SMA looks quite flat, showing a loss of long-term upward momentum. This situation further suggests that speculators are taking a neutral-to-down view on EUR/USD in the near term.
Support for EUR/USD comes in at 1.1200, 1.1165, and 1.1130. The resistance level is set at 1.1275, 1.1320, and 1.1360.
Digging in a little more on EUR/USD’s struggles, the 4-hour chart offers a much more nuanced view. In addition, the 100 and 200 SMAs are converging around the 1.1270 level, forming a solid resistance base. This creates an uphill battle for any upward movements for the pair. The 20 SMA are a few pips beneath the current EUR/USD close. Given this positioning, it could serve as an impediment to any additional progress.
Other market indicators point to a lack of conviction as to which way the currency pair will ultimately break. Momentum indicator floats aimlessly around its 100 line, indicating no meaningful buy or sell pressure. The RSI is now headed south at around 52, which could be a sign of weakening bullish momentum.