EURUSD did not find enough buyers to successfully breach the surface of the Ichimoku cloud and the restrictive line stretched from August despite moving beyond them to peak at 1.2242 last week.
Encouragingly, however, sellers were not strong enough either to create a lower low below the cloud, keeping the upward direction from February’s bottom valid and supported near a tentative short ascending trendline.
Currently, the RSI and the MACD provide little hope for improvement as the former has crossed below its 50 neutral mark, while the latter remains muted near its signal and zero lines. The latest bearish cross between the 20- and 50-day simple moving averages (SMAs) is another negative warning.
To confirm a bullish bias, the price may need to close clearly above the tough border of 1.2150 – 1.2175, in which case resistance could immediately occur around the 1.2265 obstacle. Higher, the door would open for the 33-month high of 1.2348, and should this give way for more progress, the next target could be the 1.2400 round-level.
Alternatively, if the bears drive the pair below the cloud and the 1.2045 barrier, where the 20 SMA is placed in the weekly chart, selling pressure could strengthen towards the 1.1950 trough unless the 1.2000 mark comes to the rescue. Lower, the 1.1875 number could be the next spot for an upside reversal.
In brief, EURUSD is expected to hold its neutral mode in the short run, unless it rallies above the 1.2150 -1.2175 zone or slides below 1.2045.