Technical Analysis – EURUSD creates symmetrical triangle

eur-usdEURUSD has been underperforming in the past two days, failing to extend its gains to the upside. The pair has been developing within a symmetrical triangle since February in the short- to medium-term timeframe, while the price lacks a clear trend. In the longer-term, the single currency has been developing in an ascending movement against the greenback over the last year.

Looking at the daily timeframe, prices are holding above the 20- and 40-simple moving average (SMA), which are flattening near the 1.2320 price level. The RSI indicator is holding slightly above the threshold of 50, while the MACD oscillator remains flat around the zero line. Both are moving with weak momentum.

Upsides moves are likely to find resistance at the descending trend line of the triangle formation near the 1.2430 barrier. A successful close above the aforementioned obstacle could shift the neutral short-term bias to bullish and push the price towards the 1.2470 resistance level. Breaking this level could see a re-test of the 1.2540 high, taken from the peak on January 25.

On the flip side, a move to the downside, below the 20- and 40-SMAs could see immediate support at the longer-term ascending trend line near the 1.2300 handle. A slip below this level could re-challenge the ascending diagonal line of the symmetrical triangle, which overlaps with the 1.2220 support level. Any strong violation of this point could increase chances for further losses probably until 1.2160.

Origin: XM

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