EURUSD has been underperforming in the past two days, breaking below the long-term ascending trend line, which has been holding since March 2017. However, the single currency is still standing in the symmetrical triangle formation against the greenback as it finished the day around the 1.2250 price level, near the lower boundary.
In the daily timeframe, the RSI indicator is currently increasing negative momentum below the threshold of 50, while the MACD oscillator is slowing down in positive zone and created a bearish crossover with its trigger line. Both are hinting that the next move in prices is likely to be on the downside rather than on upside. Also, the pair is developing well below the 20- and 40-simple moving averages.
Should the market extend losses and slip below the triangle pattern, the main bullish trend in the medium term could shift to bearish. Support could be met near the 1.2220 barrier, which holds near the lower band of the triangle. A significant leg below this level could send prices towards the 1.2160 level, taken from the low in March.
Conversely, if the pair bounces up, immediate resistance could be provided by the 20- and 40-SMAs around 1.2320. In case of more advances, the pair could touch the upper band of the pattern near 1.2412, which is near the peak of April 17. A jump above this strong resistance level could open the way towards the 1.2470, taken from the peak on March 27.
Origin: XM
