The EUR/USD currency pair is at an inflection point. Now, it’s looking to establish a new long-term course in the rapidly changing market. The pair remains stuck near the 1.1670 level. Last week’s trading sessions show signs of promise on both the bullish and bearish sides. In order to continue its rally in the days ahead, it will have to recapture its weekly high just above 1.1730. Market participants are closely watching important support and resistance levels. These levels can have a serious impact on the future direction of this popular traded currency pair.
On the technical side, EUR/USD is coming into clear support at 1.1630. That’s right around the directionless 20 Simple Moving Average (SMA). This level is an important line in the sand for traders, a break or failure to hold here could lead to more downside. The pair experienced selling pressure recently, dropping to a critical support level at 1.1620 before finding buyers during European trading hours at 1.1667.
On the daily chart of EUR/USD we can see that it is still trading above all its moving averages. Additionally, its upward position severely curbs its bearish potential. The very bullish 100 and 200 SMAs are still marching below the shorter 20 SMA. This configuration lays the groundwork for upward movement that is unmistakably favorable. Yet for all the bullish sentiment, the pair has struggled to build much momentum.
As the US data was released, EUR/USD fell to as low as 1.1647. This action highlights the persistent uncertainty still taking place within the marketplace. The impact of the US data was crucial for the traders, further indicating how sensitive the currency pair is to macroeconomic news. EUR/USD remains within the past range. Technical indicators are printing shallow divergences above their respective midlines, an indication that traders are currently in a ‘buy/sell undecided mode.
According to the four-hour chart, the currency pair has traded sideways over the near term. Specifically, find it languishing between the converging 20 and 200 SMA’s, indicating weak directional strength. Further confirmation that this is a key support area comes from the 100 SMA which is lacking clear direction, currently around 1.1620. Traders will be looking to see what happens at the moving averages’ convergence. They’re waiting to make major commitments until they see more obvious signals.
Support levels are seen at 1.1620, 1.1585 and 1.1550. On the other hand, the 1.1700, 1.1740, and 1.1785 levels are indicated as resistance. The closeness of these levels indicates that traders should be on guard whenever price action gets close to these boundaries.