EUR / USD:
(Technical changes over this period are often limited, although they serve as a guide for possible longer term moves)
After a three-month retracement, demand at 1.1857-1.1352 entered and inspired a bullish rally in April, up 2.4% at the close.
April’s rise highlights the possibility of further 2021 peaks in the coming months, followed by an ascending stress test (earlier support [1.1641]).
Based on trend studies, the primary The uptrend has been going on since the price crossed the high of 1.1714 (August 2015) in July 2017. Additionally, the price broke through the trendline resistance, taken from the high of 1.6038 , in July 2020.
A combination of month-end flow and good Friday offer in USD saw the European common currency drop 0.8% against the USD and finish around session lows.
Leaving Quasimodo’s resistance at 1.2169 unchallenged, EUR / USD bears have the 200-day simple moving average on the radar this week (1.1935). Technical analysts will note that moving averages tend to offer dynamic support and resistance when tested.
The upside momentum stabilized in the latter part of last week – passing a trickle of RSI overbought territory – to return to the 55.00ish range. The support of the RSI at 46.23 therefore deserves attention this week.
Despite the 2021 retracement, trend studies reveal that the currency pair has been entrenched in an uptrend since early 2020, a move that many traders will likely call a core trend around this time.
Friday’s one-sided decline resulted in candle action close to support at 1.1990. Technical material also highlights a Fibonacci cluster between 1.1971 and 1.1986 – an area defined on a price chart where Fib retracement levels converge.
The reversal of the aforementioned Fib cluster this week reveals additional support at 1.1937 (aligns closely with the 200-day simple moving average on the daily scale at 1.1935), while an upward rotation exposes the resistance at 1.2108.
The euro found itself on the back of the greenback as US hours approached on Friday, setting an offer at 1.2091-1.2077 and dethroning demand coming from 1.2049-1.2061.
Technically speaking, this could bump the EUR / USD with the key figure of 1.20 at the start of the week.
While the round number is likely to be a watched base in this market, traders are advised to consider the possibility of a boost through the level. Orders are likely to invade this area, welcoming a movement known as the stop running. Bids, assuming heavy orders, coming from both H1 support at 1.1989 (earlier Quasimodo resistance) and H4 support between 1.1971 and 1.1990, can therefore accommodate stops (sell orders) below 1.20.
In terms of an RSI indicator, the value traveled deep into oversold territory and approached support at 13.07.
April showing some life on monthly demand of 1.1857-1.1352 reinforces a possible retest (trough buy scenario) of the 200-day simple moving average at 1.1935 this week.
The H4 structure reveals that the support is between 1.1971 and 1.1990. A test of this area ignites a potential stop running through the H1 period number of 1.20 – move that could motivate a bullish presence to at least 1.2050ish.