EURUSD resumed upside momentum on Friday but the gains were not enough to overcome the 1.12 key resistance area, with the price remaining below its simple moving averages (SMA) as well.
The MACD continues to hold close to its red signal line and the RSI keeps fluctuating near the 50 neutral mark, both pointing to a sideways short-term trading.
A decisive close above the previous high of 1.1214 and therefore higher than the 50-day SMA could spark a stronger rally, turning the spotlight to May’s peak of 1.1262. Running higher and towards the 1.1320-1.1346 former congested zone, would bring into question the downtrend started early in January .
On the downside, the market seems to be creating a floor around 1.1110 and any drop below that boundary could raise selling volumes, extending the five-month old downleg probably towards the 1.10-1.0950 area.
Meanwhile in the medium-term picture, the negatively sloped 50-day SMA which continues to distant itself below the longer-term 200-day SMA suggests that the bearish profile is likely to stay.
In brief, EURUSD is expected to consolidate in short term, while in the medium-term the outlook remains bearish.
