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Technical Analysis – EUR/USD stretches range-bound trading

EUR/USD 26 MAR 2018 | EconAlerts


EUR/USD closed higher in Friday’s trading but maintained in a range between 1.2150-1.2450 started at the end of February, with technical indicators suggesting that the sideways pattern might continue for a while.

Looking at momentum indicators, the RSI is pointing to the upside, giving some positive signals for the short-term, though, the index has not deviated much above its neutral threshold of 50. Therefore, we expect the pair to improve moderately in the short-term, remaining overall in a range. MACD barely holds in positive territory and is still capped by its red signal line, painting a neutral picture as well.

Should the pair make a step higher, the area between 1.2400-1.2450, which includes February’s highs, could offer nearby resistance before the focus shifts to the three-year peak of 1.2554. A close above this top could see prices rallying towards the 1.26 handle, while a more decisive upside move could open the door to the 1.2700 psychological level as well.

To the downside, if the market weakens, support could come around the area between 1.2336-1.2316 where the 23.6% Fibonacci of the up-leg from 1.1553 to 1.2554, and the 50- and the 20-day simple moving average lines are currently located. A leg below this mark could target 1.2240, a frequently congested area since the beginning of the year, while steeper decreases could also revisit the 38.2% Fibonacci of 1.2170. However, only a break below the March low of 1.2153 could trigger bearish extensions, resuming the downtrend from 1.2554.

In the medium-term, the market looks bullish, given that the market maintains its uptrend recorded over the last three months and the bullish cross between the 50-day and the 200-day SMA remains intact. However, the bullish signals could be stronger if prices manage to increase their distance from the 50-day SMA.

EUR/USD 26 MAR 2018 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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