The EUR/USD currency pair is now holding steady near the 1.1700 level. It is doing this while trying to navigate a very complicated and tumultuous market environment in the early American trading session. In fact, earlier this week, EUR/USD hit a high of 1.1718, thanks to the acute dollar weakness. Now, even with the wind taken out of their sails, the bulls are hell-bent on trying to add to their recent gains.
As always, the market knows best, EUR/USD needs to break the nearest resistance level at 1.1710 for the bulls to keep pushing this pair higher. Looking at the 4-hour chart, we can see how the 100 Simple Moving Average (SMA) acts as a dynamic resistance here. This makes any bullish push much more difficult. The currency pair fails to move above the flat 20 SMA, located around 1.1705. This is indicative of the steep climb it has—especially in today’s political climate—to stay an upward trending momentum.
The trading week started with a big flare as EUR/USD jumped to 1.1718. This spike was further exacerbated by a general decline in the value of the US Dollar. Tensions rising between US President Donald Trump and US Federal Reserve Chairman Jerome Powell added to the intensity of this spike. Together, their conflict has thrown major market uncertainty. Traders are understandably fixated on what is a rapidly-changing situation. They’re interested to see how these political and fiscal tensions will perform the US Dollar.
The technical picture looks mixed for EUR/USD. The Momentum indicator is presently below the 100 level, indicating weak directional flow. The Relative Strength Index (RSI) is at 56 right now, indicating that the pair is not overbought or oversold. This confluence of events has traders extremely jittery. These mixed signals exert a tendency to promote confusing hesitation on the part of bullish or bearish market forces.
For EUR/USD, the nearest support from a technical viewpoint would be the 20-day simple moving average at 1.1640. Other support lobbies are at 1.1635, 1.1600 and then lower at 1.1560. These levels will be important for traders to watch for signs of reversals or continued range-bound behavior in the pair.
EUR/USD is flat just under the 20 SMA, which is flat, at 1.1705. Market participants are holding their breath, just waiting to pounce at the first glimmer of promise, progress, or turnaround. Initial focus for traders will be on the price action near 1.1710. The directional resistance formed by the 100 SMA renders this zone a major battleground for the bulls and the bears’ tactics.