EURUSD is in a tight range between the 23.6% Fibonacci retracement of the 1.1988 – 1.1703 downfall and the 50-period simple moving average (SMA) on the four-hour chart for the second consecutive day.
The momentum indicators provide a mixture of signals. The MACD prepares to enter the positive area and the RSI, although a bit weaker remains above its 50 neutral mark, both keeping the short-term risk tilted to the upside. On the other hand, the green %K line of the Stochastic oscillator has crossed below the red %D line in the overbought area, increasing the case for a negative price correction.
Nevertheless, a trend reversal may not be easy to achieve. If the price was to press above the 50-period SMA, it should also violate the resistance trendline and close above the 38.2% Fibonacci of 1.1812. Then, a sustainable move above the Ichimoku cloud, which has been capping upside corrections since mid-March, may be requested to enhance buying engagement. The 50% Fibonacci of 1.1846 may toughen the battle around the cloud too.
On the downside, a break below 1.1760 may lead the price towards the 20-period SMA at 1.1740. Failure to rebound here could see the test of the 1.1703 low, a break of which would shift the spotlight straight to the supportive line seen around 1.1650.
Summing up, EURUSD is currently indecisive within the 1.1785 – 1.1770 area. There is some hope for an upside continuation, though only a sustainable move above the cloud and the 1.1846 level may keep buyers in play.
Origin: XM
