EUR/USD continued trading higher on Friday, breaking above the resistance (now turned into support) territory of 1.1730. The pair has been trading within a sideways range between 1.1520 and 1.1850 since the 15th of May and thus, we remain neutral for now, at least with regards to the short-term outlook.
That said, on the 28th of June, the pair started to recover after finding support near the lower end of the aforementioned range, with an upside support line marking that recovery. Thus, if the bulls are strong enough to stay in charge, we would expect them to drive the battle up to the 1.1835 barrier, or the upper boundary of the range, at around 1.1850. A break above that zone could signal the pair’s upside exit of the range and could initially aim for our next resistance territory of 1.1900.
Looking at our short-term oscillators, we see that the RSI edged up, but it has started to flatten near its 70 line, while the MACD, although above both its zero and trigger lines, shows signs of slowing down as well. Thus, we stay cautious that a small setback may be looming before, and if, the bulls decide to shoot again, perhaps towards the crossroads of the 1.1730 level and the upside line drawn from the low of the 28th of June.
On the downside, we would like to see a clear dip below 1.1720 before we start assuming that the bulls have abandoned the battlefield, at least for a while. Such a move could initially pave the way towards the 1.1670 hurdle, the break of which is likely to carry extensions towards our next support, at around 1.1630.
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