EUR/USD still cannot get out of its range that it is trading in. The pair sits between a strong area of support at 1.1510 and a key level of resistance at around 1.1840. Until it decides to make a break through one of the sides, we will continue monitoring the price action within that range and take a somewhat neutral position.
This week, EUR/USD found its resistance at around the 1.1790 mark and then moved lower to break the 1.1690 level yesterday. Although within the range, the pair looks weak and this could lead to a further drop towards the 1.1600 area, a break of which could open the path towards the lower side of the range at the 1.1510 hurdle. This where the rate could stall, as the bulls and the bears may start battling it out over who takes control there.
The RSI is below 50, and although it is pointing slightly up, it remains on a downtrend structure. The MACD has turned negative, as it dropped below the zero line and its trigger line. Both indicators detect negative momentum and support the case for the rate to continue drifting lower for a while more.
Alternatively, a move back above the 1.1690 hurdle could open the door to the 1.1790 level, which was the highest point this week, for a possible test. If the bulls remain in the driver’s seat, then a break of that level could lead to a test of the upper side of the range at 1.1840. This is also a point, where the bulls and the bears could start fighting over the faith of EUR/USD.
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