EURUSD has stalled its uptrend and is likely shifting into a neutral phase. The pair maintains the bullish medium-term market structure and remains in an ascending channel. After reaching a multi-year high of 1.2069 on August 29, upside momentum faded and prices fell back to close below the key 1.2000 level last Friday.
Momentum indicators (RSI and MACD) are moving sideways and highlight the shift into a neutral phase, while remaining in bullish territory.
It remains to be seen whether EURUSD has made a short-term top at 1.2069. While the pair is likely in the early stages of a consolidation phase, the immediate risk is for a move lower towards 1.1772 (August 25 low). This is the bottom of the expected consolidation range, with resistance at the range-top at 1.1983.
A break below 1.1661 support and August17 low increases the odds for a deeper fall to 1.1471, bringing the market near the 50% Fibonacci retracement level of the 1.0820 to 1.2069 uptrend. From here, a bearish outlook becomes stronger.
Alternatively, a daily close above immediate resistance at 1.1900 would shift the focus back to the upside for a re-test of the 1.2069 high. A sustained move higher would see a resumption of the uptrend to strengthen the bullish outlook with scope to rise to the 1.2200 area.
In the short-term EURUSD is leaning to bearish due to increased risk to the downside. The overall technical picture on the daily chart is bullish. This is confirmed by the bullish crossover of the 50-day with the 200-day moving average on May 23. Both moving averages are pointing upwards.
