The EUR/USD currency pair continues its extensive period of consolidation, capped below a recently set 1.1454 multi-week high. With the European Central Bank (ECB) meeting approaching, the pair is holding positive form. That is the first step towards even greater advances in the near future. Traders have been awaiting the technical signals that back such a bullish view.
Since May 19, this ascending 10-day moving average has tracked pretty diligently with the price action of EUR/USD. It provides very good support on the downside at 1.1373. This is the most important level. It coincides beautifully with the broken Fibonacci retracement level of 61.8% from the pullback range of 1.1573 to 1.1065. Analysts acknowledge that this support level has the potential to allow this currency pair to stay on an upward trajectory over the coming few weeks.
Digging deeper we find the daily Tenkan-sen (a critical indicator in Japanese candlestick charting) lies at 1.1332. This level should be able to cap any upward slippage in the currency, providing further comfort to investors. Should the EUR/USD descend below this point, look out for a subsequent lower trigger at 1.1286. This important point corresponds well with the available-day cloud top. For now, sentiment is strongly in favor of keeping a floor above these levels.
EUR/USD support is seen at 1.1400, 1.1330 and 1.1295. Resistance is seen at 1.1453, 1.1473 and 1.1500-1.1547. Market participants will pay careful attention to these resistance levels. In the days ahead, they’ll decide if the talented pair can bust through these barriers. The stacking of resistance levels suggests that, despite the bullish momentum, there could be obstacles lurking just up the road.
On a technical basis, the outlook for EUR/USD remains bullish. A few bullish daily indicators show strong positive momentum, with moving averages lined up in a bullish way. What’s more is that a form daily inversion of capital structure supercharges near-term price action, delivering even more fuel for bullish breakout.
Support levels hold firm at 1.1404 and 1.1357. This firm foundation inspires traders’ confidence while moving through turbulent market waters. Layered support levels further bolster conviction that the EUR/USD will hold (or return to) steady. That’s because this resilience has been remarkable, despite a tumultuous financial market and a looming recession.
With the ECB meeting coming close, market participants will be on the lookout. Specifically, they’ll be looking at economic metrics and monetary policy changes to gauge what may affect the euro’s performance against the US dollar. Their associated market reactions often have far-reaching effects on currency valuations.