The EUR/USD currency pair pulled back from its weekly high on Tuesday, changing hands a little under 1.1400 level. At present, it stands just under 1.1380, marking a slight decrease as market contexts change. Analysts caution that the duo has a long road ahead amid confusing signals from multiple technical indicators.
On the 4-hour chart, EUR/USD is currently testing a bullish 20 Simple Moving Average (SMA). This SMA has rocketed well above the flailing 100 and 200 SMAs. That’s great news, and it shows upward momentum in the short run. The big long-term picture still looks cloudy. The 100 SMA is still advancing, but there’s a noticeable distance with the 20 SMA, indicating there might be less upward momentum potential.
Yet even with this recent rally, the daily chart still argues that EUR/USD’s downward march could continue in the days ahead. The likelihood of a sharper drop seems pretty well-contained for now. The currency pair continues to trade above all of its moving averages, suggesting that the overall sentiment on this currency pair is still bullish.
Support levels for EUR/USD are at 1.1330, 1.1270 and 1.1240. Resistance is at 1.1420, 1.1460 and 1.1505. Traders are keeping a very, very close eye on these levels as they may determine the next major move in this increasingly important currency pair.
The Momentum indicator for EUR/USD has turned flat just above the 100 level, signaling a potential slowing of upward momentum. Meanwhile, the Relative Strength Index (RSI) is trending downward but remains above its midline, reflecting a delicate balance between buying and selling pressures.
The global outlook is becoming increasingly challenging. The OECD cautions that this growth is at serious risk. On the negative side, they point out that increasing trade barriers, tougher financial conditions, falling confidence of businesses and consumers, and greater policy uncertainty are headwinds. This high-level analysis highlights the environment in which forex investors are operating when they trade the EUR/USD cross.