EURUSD opened the week with a muted tone, consolidating its rebound off 5½-year lows marginally below the tough resistance trendline drawn from the 1.1494 high and its shorter-term simple moving averages (SMAs) around 1.0580.
The upside reversal in the RSI and the MACD’s slow improvement above its red signal line is sending some positive vibes about short-term trading, though as long as the indicators hover in the bearish area, downside risks remain intact. The stochastics are setting a bearish intersection following their latest upleg, mirroring fading buying appetite as well.
Slightly above the trendline, the 23.6% Fibonacci retracement of the 1.1494 – 1.0348 downleg might prove another struggle for the bulls at 1.0620. Therefore, traders may wait for a durable extension above that bar before targeting the 38.2% Fibonacci of 1.0789 and May’s swing high. Running higher, the pair will need to claim the 50% Fibonacci of 1.0925 to gain direct access to the longer-term trendline at 1.1065 and the 61.8% Fibonacci of 1.1135. Strikingly, the falling 200-day SMA is located within the same region.
Alternatively, should the pair lose the battle at 1.0549 and correct lower, it could immediately find some footing around the 1.0459 restrictive area. Failure to bounce here would bring the double bottom around 1.0348 next into consideration. Any violation at this point is expected to extend the more-than-a-year old series of lower lows towards the 1.0200 psychological level.
In brief, EURUSD is reflecting a neutral-to- bearish bias in the short-term picture. A move above 1.0620 or below 1.0459 could navigate the market accordingly.
EUR/USD Tests Key Resistance Trendline; Bias Neutral-To-Bearish
