EURUSD is consolidating around the key psychological level at 1.1400. After hitting a 13-month high of 1.1445 on June 29, there was a slight pullback since the market reached overbought conditions, as was indicated by the RSI rising to 70.
Upside momentum has weakened and a neutral phase is expected in the near term. Any corrective move lower would likely find support at 1.1290. This is considered to be an important level since it was recently tested as both support and resistance. Further weakness below this level may see EURUSD slip towards 1.1108. A break from here would target 1.0822, which is where the 200-day moving average converges and was also a level previously tested as support and resistance.
Looking at the bigger picture, the uptrend that started from the January 3 low of 1.0340 to the June 29 high of 1.1445 is still intact. There are no signs of a reversal in the uptrend yet. The risk is to the upside based on the bullish market structure on the daily chart. There was a bullish crossover of the 50-day MA with the 200-day MA on May 23, while the 50-day MA is still rising. RSI remains in bullish territory above 50. All these technical signals highlight the bullish bias in the market.
A successful break above the 1.1445 high would open the way towards the key 1.1500 area with scope to target the May 3, 2016 peak of 1.1616. Such a move would strengthen the medium-term bullish bias.
