Buyers look to establish near-term bullish bias
The dollar remains weak across the board today and from most charts it's easy to see why. Near-term momentum favouring the dollar has mostly been broken and EUR/USD is no exception to that. Buyers broke the 100-hour MA (red line) in trading yesterday and have continued to bid the pair higher to now close in on a test of the 200-hour MA (blue line) @ 1.1632.
Move above and the near-term bias turns more bullish - and that could lead to an extension of the upside run that we're seeing after the pair bottomed at 1.1530 on Monday.
However, there are near-term resistance levels beyond the 200-hour MA that needs to be addressed as well. The 50.0 retracement level @ 1.1638 and the 30 July low @ 1.1648 are the next two levels that sellers can lean on. Beyond that, there is the 61.8 retracement level @ 1.1663. Looking at higher levels, there is also the 76.4 retracement level @ 1.1695 with offers also sitting at 1.1700 - also the 1 August high.
While near-term momentum appears to be siding with buyers for now, more work needs to be done in order to move towards 1.1700 and beyond. And of course, the first and most crucial test (in my view) being the 200-hour MA @ 1.1632 itself.
But in the bigger picture, we're very much consolidating between the low 1.1500 levels and the 1.1720-50 levels since mid-June. There was a potential break of that range in early July where the high reached 1.1791 but ultimately it didn't amount to much.
It's summer trading right now and early August is very much the peak of it. We may have to wait a while longer before we see the next real breakout trend in the pair.
